Kakao Mobility’s value has doubled in three years following an aggressive expansion into new mobility services, and it is finally expected to return a profit this year.

The affiliate of South Korean internet giant Kakao will raise $300 million from U.S. private equity firm Carlyle Group in a deal that values it at more than three trillion won ($2.67 billion). This represents two-fold growth from 2017 when it raised 500 billion won from Korea Investment Partners, California-based TPG Capital and Japan’s Orix at a valuation of 1.6 trillion won.

Kakao Mobility operates taxi-hailing app Kakao T, which dominates the market with an 80% share. It has been actively expanding its business to include navigation, parking reservation and carpool services. Revenue grew more than six-fold to 104.8 billion won in 2019 from 16.7 billion won in 2017, when the company was launched.

Analysts project the 2020 revenue at 290 billion won, which means the three trillion won valuation represents a price-to-sales ratio of about 10 times. Most South Korean firms only achieve a ratio of five times. Such a high valuation appears to be supported by the company’s strong growth potential as a platform company in the fast-growing mobility services sector, industry watchers said.

The company is not profitable yet due to increased labor costs and marketing expenses. It posted operating losses of 22.1 billion won in 2019 and 21 billion won in 2018, but they probably fell to about three billion won last year as new services got traction. Most analysts predict the company will be profitable by the end of this year.

The introduction of a differential commission fee structure appears to be a key to Kakao Mobility’s path to profitability, industry watchers said. The company attempted to raise its ride-hailing fees in 2018 but scrapped the plans due to a backlash from the taxi industry and the government. It has since focused on its premium taxi services, where users are less sensitive to the fee increase, in a bid to improve profitability.

Some analysts expect the company’s value to grow to a range of five trillion won to seven trillion won in the long term. KTB Investment & Securities said in its latest report that the gross merchandise value of taxi firms partnering with Kakao Mobility is expected to increase from 538 billion won in 2020 to 3.33 trillion won in 2025.

The company is preparing for an initial public offering on the Seoul stock exchange that could occur as early as 2022. (Reporting by Si-eun Park)