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IPOs

Kakao Pay set to be Korea's first mobile-payment fintech to go public

Sep 28, 2020 (Gmt+09:00)

Kakao Pay Corp. is set to become South Korea’s first mobile-payment fintech company to go public as the company kicks off preparations for an initial public offering, according to the financial industry on Sept. 28.

“There may be some variables such as market conditions, but we’re preparing to go public in the first half of next year,” said a source from Kakao Pay.

The company is expected to be valued up to 10 trillion won ($8.5 billion). On Monday, the company mandated KB Securities Co. as the lead IPO advisor and requested the Financial Supervisory Service to designate an auditor.

The fintech arm of Kakao Corp., the country’s largest messaging app operator, has over 34 million users, boasting the largest number of users for a domestic mobile payment platform. The company handled payment transactions worth 29.1 trillion won during the first half of the year.

The company plans to use the IPO proceeds to tap into new business areas. The fintech platform is pushing to add a digital insurance unit to its portfolio in addition to the insurance and securities divisions. This will allow Kakao Pay to cover all areas of finance, with the exception of banking, which is accounted for by Kakao Bank.

The company has been shoring up its operations recently. Kakao Pay first launched as a simple mobile payment service running on Kakao Talk in 2014. Kakao Pay quickly branched out its services to include money transfers, bill payments and asset management

In 2017, the company spun off from Kakao Corp, the biggest shareholder with a 43.9% stake, and received $200 million from the second-biggest shareholder Alipay Singapore Holding Pte Ltd. In June Alipay injected an additional $100 million into the company.

The company used its capital to acquire Inbyu, a local insurance platform, to serve as a general agency in 2019. In February the company also acquired Baro Investment & Securities, which became Kakao Pay Securities Corp. Just six months after its inception, Kakao Pay Securities scored solid growth with 2 million accounts and monthly fund investments reaching over 4.4 million.

Kakao Pay will become the second Kakao Corp affiliate to go public. It has not yet been determined if the company will list on the country’s main Kospi bourse or the tech-heavy Kosdaq.

Last week, Kakao Bank also announced its plans to go public in the second half of 2021.
Riding on Kakao Games’ successful IPO, which posted a number of fresh records, the parent company is hoping to achieve similar levels of success with Kakao Pay and Kakao Bank. Meanwhile, another affiliate Kakao Page, a digital content provider, is also gearing up to go public during the second half of next year.

Write to Young-chan Song at 0full@hankyung.com

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