Kakao Corp., South Korea’s most popular messaging app operator, became the country’s fifth-largest business group in terms of market capitalization. Kakao previously began as a mobile messaging service provider and actively ventured into other business sectors.
Yonhap Infomax, a market information provider, and Korea Exchange’s financial data indicated that Kakao and its affiliates’ combined market capitalization amounted to 73.9 trillion won ($65.2 billion).
After conducting extensive mergers, acquisitions, and spinoffs during the past years, Kakao acquired 118 affiliates, significantly expanding its business portfolio. At present, only three Kakao Affiliates are selling their shares to the public, including Kakao Corp., Kakao Games, and Neptune.
Data showed that Kakao’s market cap experienced a sharp rise from 2019’s 13.2 trillion won ($11.6 billion). Besides its skyrocketing market cap increase, Kakao’s value increased by over 459% due to its affiliates’ stock price spikes. Kakao’s market cap also closely follows behind South Korea’s most prominent conglomerates.
Moreover, Samsung Electronics currently boasts a combined 751 trillion won ($662 billion) market cap, while SK Group’s market value reached 200 trillion won ($176 billion). Meanwhile, LG Group has a 158 trillion won ($139 billion) market cap, and Hyundai Motor Group holds 152 trillion won ($134 billion).
Kakao’s Wide-Ranging Expansion
Furthermore, Kakao’s substantial growth came from its robust earnings in various business areas, including advertising, original content production, and e-commerce. Kakao and its affiliates have also been aggressively preparing for upcoming initial public offerings (IPO).
In particular, the group’s content production subsidiary, Kakao Entertainment, announced its plan to file for an IPO in 2022, aiming to attain a 20 trillion won valuation. Kakao Entertainment also recently entered the over-the-top streaming sector after acquiring INISOFT Co., a multimedia service operator.
Kakao Pay, Kakao’s fintech unit, also plans to list its shares, becoming Korea’s first-ever mobile fintech platform to go public. What’s more, Kakao Pay plans to launch an online-only non-life insurance platform, with the FSC already giving preliminary approval.
Additionally, the group’s cab-hailing app operator, Kakao Mobility, plans to join the automotive aftermarket sector and introduce new related services. Kakao Bank, Kakao’s flagship banking platform, would also go public in July. Ahead of the IPO, Kakao Bank’s shares amounted to 97,000 won ($79), raising its market cap to around 40 trillion won ($35 billion).
Separately, Kakao would launch a new e-commerce platform temporarily called Kakao Store during this year’s second half. According to Kakao, Kakao Store’s profit model would include no commission fees and enable sellers to access its customer database.
