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Korea Development Bank paves way for Kakao Enterprise IPO

Korea Development Bank Chairman Lee Dong-gull, left, and Kakao Enterprise CEO Baek Sang-yeop / Korea Times file
Korea Development Bank Chairman Lee Dong-gull, left, and Kakao Enterprise CEO Baek Sang-yeop / Korea Times file

By Park Jae-hyuk

Kakao Enterprise has come to the fore as another Kakao subsidiary that will likely go public in the near future, after the artificial intelligence (AI)-based service provider attracted large-scale investment from Korea Development Bank (KDB), according to industry officials, Thursday.

KDB said Wednesday it decided to acquire 1.36 million newly issued Kakao Enterprise shares for 100 billion won ($91 million). The state-run lender, which became the tech firm's second-largest shareholder with an 8.8 percent stake, estimated the company's valuation at 1.15 trillion won. Before the investment, Kakao Enterprise's valuation was estimated at 81.4 billion won.

"Considering the necessity of aggressive financial assistance for startups with high growth potential, we will not hesitate making large-scale investments in innovative companies," KDB Chairman Lee Dong-gull said.

Kakao Enterprise CEO Baek Sang-yeop said, "We will become the company that can lead the digital transformation utilizing our innovative DNA and IT technologies."

Following the investment, industry officials were viewing Kakao Enterprise as one of the candidates to go public within the next few years.

Kakao Enterprise was actually not on the minds of stock market insiders, despite its parent company's efforts to list its subsidiaries on the Seoul bourse.

Kakao successfully listed Kakao Games on the tech-heavy Kosdaq market last September, attracting the record subscription deposits. KakaoPay, Kakao Bank and Kakao Page, all of which have finished hiring their initial public offering (IPO) underwriters, are set to go public within a year.

Those mentioned as companies that would launch IPOs following the three were Kakao Mobility and Kakao Commerce. In particular, Kakao Mobility is expected to go public by 2022 because the ride-hailing service provider had agreed to seek an IPO within four years, when it sought investment in 2017 from a consortium comprised of TPG Capital, Korea Investment Partners and Orix.

Kakao Enterprise's listing is expected to take place after Kakao's other five subsidiaries complete their IPOs. Given the five's valuation is estimated at least 2 trillion won, Kakao Enterprise needs to increase its valuation further by improving its earnings and attracting additional investment.

The company plans to spend the money it received from KDB for improving its core businesses and developing technologies for new businesses. It plans to launch a new business service platform and an AI data service structure sometime this year.


Korea Development Bank Chairman Lee Dong-gull, left, and Kakao Enterprise CEO Baek Sang-yeop / Korea Times file
Korea Development Bank Chairman Lee Dong-gull, left, and Kakao Enterprise CEO Baek Sang-yeop / Korea Times file

By Park Jae-hyuk

Kakao Enterprise has come to the fore as another Kakao subsidiary that will likely go public in the near future, after the artificial intelligence (AI)-based service provider attracted large-scale investment from Korea Development Bank (KDB), according to industry officials, Thursday.

KDB said Wednesday it decided to acquire 1.36 million newly issued Kakao Enterprise shares for 100 billion won ($91 million). The state-run lender, which became the tech firm's second-largest shareholder with an 8.8 percent stake, estimated the company's valuation at 1.15 trillion won. Before the investment, Kakao Enterprise's valuation was estimated at 81.4 billion won.

"Considering the necessity of aggressive financial assistance for startups with high growth potential, we will not hesitate making large-scale investments in innovative companies," KDB Chairman Lee Dong-gull said.

Kakao Enterprise CEO Baek Sang-yeop said, "We will become the company that can lead the digital transformation utilizing our innovative DNA and IT technologies."

Following the investment, industry officials were viewing Kakao Enterprise as one of the candidates to go public within the next few years.

Kakao Enterprise was actually not on the minds of stock market insiders, despite its parent company's efforts to list its subsidiaries on the Seoul bourse.

Kakao successfully listed Kakao Games on the tech-heavy Kosdaq market last September, attracting the record subscription deposits. KakaoPay, Kakao Bank and Kakao Page, all of which have finished hiring their initial public offering (IPO) underwriters, are set to go public within a year.

Those mentioned as companies that would launch IPOs following the three were Kakao Mobility and Kakao Commerce. In particular, Kakao Mobility is expected to go public by 2022 because the ride-hailing service provider had agreed to seek an IPO within four years, when it sought investment in 2017 from a consortium comprised of TPG Capital, Korea Investment Partners and Orix.

Kakao Enterprise's listing is expected to take place after Kakao's other five subsidiaries complete their IPOs. Given the five's valuation is estimated at least 2 trillion won, Kakao Enterprise needs to increase its valuation further by improving its earnings and attracting additional investment.

The company plans to spend the money it received from KDB for improving its core businesses and developing technologies for new businesses. It plans to launch a new business service platform and an AI data service structure sometime this year.


Park Jae-hyuk pjh@koreatimes.co.kr


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