Naver subsidiary splurges on metaverse, resell platform acquisitions

Snow Corp., a subsidiary of South Korea’s tech behemoth Naver Corp., has either already invested, or is slated to invest, in 11 companies so far this year. 

Snow's own subsidiary Kream is poised to invest 5.5 billion won ($4.5 million) in used fashion exchange platform operator Craving Collector, according to those familiar with the deal. 

Kream, which operates online platform for trading limited-edition sneakers dubbed Collectiv, used to be part of Snow but became an independent corporation on Jan. 1 of last year. With the latest investment, Kream will be able to expand its reach beyond the sneakers market to also encompass luxury apparel business. 

The company is expected to have a 70% stake in Fab, operator of online platform Chicement for trading used luxury goods by investing 7 billion won. Last month, it invested 3.5 billion won into Singapore-based Keystar International, which manages an online exchange for pre-owned electronics called Reebelo. 

The Naver subsidiary’s blueprint is to invest in platforms that target specific users such as those interested in used goods, luxury or otherwise.

VIRTUAL WORLD

Naver Z, another subsidiary of SNOW, invested in more than eight companies this year. The company is best known as the operator of Asia’s No. 1 ranked metaverse platform Zepeto. 

In January, the metaverse arm of Naver purchased a 33.33% stake in Pinocchio, which it jointly developed with mobile game developer LunoSoft, for 4 billion won.

Around the same time, the Zepeto operator also injected a billion won into Persona Space. The company creates content for the metaverse, most notably avatars of celebrities and virtual humans.

Recently, it invested somewhere between 200 million and 1.8 billion won in each of these companies: an AI solutions provider; content creator Metaspace Company; and music content startup SSONG Company. 

Naver Z acquired a 5.29% stake in Singapore-based blockchain developer Haderech for 1 billion won. The Naver group subsidiary invested in another Singapore-based software provider Good Gang Labs Pte. and US-based mobile game developer Brave Turtles, Inc. 

Media reports say it recently invested in KlayCity. The company operates Klaycity District, a virtual world powered by Kakao Corp.’s global public blockchain project known as Klaytn. 

Snow’s shopping spree is thanks to Naver’s financial backing. 

The internet conglomerate announced last month that it will issue 150 billion won worth of new stocks for the purpose of increasing capital. The parent company has invested some 500 billion won so far in Snow. 

The subsidiary, which develops its namesake photo and video mobile app, saw 107.5 billion won worth of operating losses in 2020. 

While there are concerns about Snow investing heavily while in the red, Naver as a whole is determined to invest to attract younger users. 

The internet giant has been criticized for not appealing to users aged 40 and younger. With the latest string of investments, Naver hopes to attract more users from the MZ Generation, as millenials and Gen Zers are called in Korea.

Snow has developed a number of services to cater to these age groups. 

In addition to the namesake photo and video filter and messenger app, it also launched English learning app Cake Corp. and an emoticon-generating app called Sticker.ly. 

The company also used to have a live commerce platform Jam Live, which closed down on Nov. 10 of last year. 

In addition to mergers and acquisitions, Naver Z is also setting up local offices abroad. Last August, it established a US corporation and set up a Hong Kong entity in January of this year. 

Write to Joo Wan Kim at kjwan@hankyung.com
Jee Abbey Lee edited this article.