NHN Cloud to raise $141 mn from stock issuance

South Korea’s cloud service provider NHN Cloud Corp. is eyeing 1.1 trillion won ($776 million) corporate value via a new stock issuance, marking the first time the company has attracted external investment.

Korean private equity firms IMM Investment Corp. and Mirae Asset Venture Investment Co. will jointly purchase NHN Cloud’s new issues worth 200 billion won, acquiring an 18% stake, according to investment banking sources on Oct. 5.    

NHN Cloud was formerly a cloud service unit of Korean gaming giant NHN Corp. The gaming developer split off the cloud unit in April as it had achieved more than 30% of revenue growth per year, showing its potential to attract great amounts of external investment.   

The cloud service firm will invest in building data centers and new businesses with the capital raised from the stock issuance. NHN Cloud has ramped up its investment in cloud technologies since the split-off, acquiring local cloud services companies Crossent and InjeINC.  

TARGETING CLOUD TRANSFORMATION OF GOVT, FINANCE SECTORS

Global cloud giants such as Amazon Web Services, Microsoft Azure and Google Cloud make up more than 60% of the cloud services market in Korea.

The top three local cloud services firms, Naver Cloud, KT Cloud and NHN Cloud, are increasing shares in the domestic government and finance sectors that have relatively strict regulations on overseas cloud firms’ entry.

NHN Cloud is providing cloud services to the science and technology ministry, interior and safety ministry and some local governments across Korea, as well as financial groups and banks such as KB Financial Group, National Federation of Fisheries Cooperatives (Suhyup) and Dong Yang Savings Bank.

Cloud services in government and public institutes are forecast to grow fast as the interior and safety ministry is aiming to transform all the information systems of such institutes to cloud infrastructure by 2025 with a 1.6 trillion won investment.

NHN Cloud has secured more than 30% of clients in the cloud transformation market of government and public institutes. With an aim to raise annual revenue to 800 billion won by 2026, the company is forecast to exceed its target revenue of 160 billion won this year.

Write to Si-Eun Park at seeker@hankyung.com
Jihyun Kim edited this article.