Korea webtoon startup Kenaz acquired by hedge fund

South Korea’s leading webtoon production startup Kenaz was taken over by a domestic hedge fund as it aims to reduce dependence on major platforms by improving its intellectual property.

GVA Asset Management Co. bought a 40% stake in Kenaz to become its top shareholder for 21 billion won ($16.3 million won), according to investment banking industry sources on Tuesday. GVA, which local media reported manages about 730 billion won, purchased 11 billion won in old shares from the existing shareholder and 10 billion won in new shares. Kenaz’ CEO Lee Woo-jae will continue to manage the startup.

Kenaz is set to spend the 10 billion won to foster its IP competitiveness.

“Other major webtoon producers, which received investment from main webtoon distributors such as Naver and Kakao, are not totally free from those platforms for their own business,” said a Kenaz official.

OVERSEAS MARKETS

Kenaz, founded in 2018, produces about 80-90 digital comics a year with some 180 creators. It has attracted overseas webtoon fans by making popular TV dramas such as W and Nine into webtoons. The startup generates more than half of its sales from other countries. Last year, it established a content production joint venture, Jungle Studio, with a domestic game developer Com2us Corp.

Kenaz aims to raise overseas sales through direct deals with foreign partners such as China’s Tencent Holdings Ltd.

“With popular webtoon IP, it is possible to survive without reliance on Naver and Kakao that dominate webtoon markets at home and abroad,” said an industry source.

GVA was known to have invested in Kenaz on its growth potential. The startup logged sales of 4.8 billion won last year, about six times of 830 million won in 2019. It also considered an initial public offering.

Write to Joo-Wan Kim at kjwan@hankyung.com
Jongwoo Cheon edited this article.