Kakao Pay Corp. announced that it had filed a preliminary approval for its initial public offering (IPO) to the Korea Composite Stock Price Index (KOSPI). Established in 2014, Kakao Pay is a subsidiary of South Korea’s biggest messaging platform operator Kakao Corp. In 2017, Kakao Pay branched out from Kakao and gained over 35 million users, with its corporate value increasing by fifteen times.
As investment banking sources stated, Kakao Pay’s IPO would become South Korea’s first mobile fintech company to go public. According to Kakao Pay, it plans to market its shares from 73,700 won to 96,300 won. Kakao Pay’s suggested share price could raise its 133 million shares’ value to 10 trillion won ($9 billion) or more.
The company’s regulatory filing also indicated that Kakao holds a 56.1% stake in Kakao Pay as of 2020. On the other hand, Ant Group’s Alipay has a 43.9% share. As long as no eligibility problems arise from China’s Ant Group being a central stockholder, industry officials expect Kakao Pay’s IPO to receive approval by early July.
“Kakao Pay has been making explosive growth led by online settlements and financial services,” said Sung Jong-Hwa, an EBest Investment analyst. Sung also stated that Kakao Pay’s IPO and growth could advance future platforms, including mobile stock trading and digital insurances. Furthermore, Kakao Pay would use the IPO earnings to launch new businesses, including asset management, brokerage, and insurance.
More IPOs from Kakao Units
Industry officials also predict that Kakao Pay’s IPO would begin almost in tandem with Kakao Bank’s listing. Another Kakao subsidiary, the digital lender and Korea’s leading mobile banking app Kakao Bank, would also go public this year. Moreover, when Kakao Bank’s IPO reaches completion, it would become the country’s first Internet-only bank listed on the Korean Exchange.
Other Kakao unit IPO applications would also quickly follow Kakao Pay and Kakao Bank’s planned IPOs. In particular, Kakao Entertainment, Kakao’s entertainment content provider unit, shared its plans to go public domestically and in the US. To prepare for its future IPO, Kakao Entertainment has continuously expanded its content portfolio by securing diverse, original IPs.
Currently, Kakao Kids, Kakao’s innovative online learning platform, is also gearing for its IPO. Since merging with English educational service provider Yanadoo in 2020, Kakao Kids has been building momentum for its trading debut. Kakao Kids also aims for a 1 trillion won ($900 million) valuation, planning to enhance its e-learning and training services. Following the significant increase of contactless platforms during the pandemic, Kakao Kids hoped to boost its home and non-contact services.
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