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| Screenshot from Kakao Commerce's website / Courtesy of Kakao Commerce |
By Anna J. Park
While Kakao's various affiliates have announced plans to go public within a couple of years, the big tech giant's most lucrative subsidiary, Kakao Commerce, has yet to reveal any plans for an IPO.
The e-commerce affiliate of the country's largest mobile chat provider logged annual revenue of 573.5 billion won ($513 million) last year, a 94 percent increase from 2019. Its operational profit stood at 159.5 billion won, a year-on-year increase of 110 percent. With the impressive performance, the firm has logged two consecutive years of net profits since it was split off from its parent company in late 2018.
Despite the solid growth and profitable performance, the firm hasn't yet revealed any plans for an IPO. The firm's official stance regarding this is that "nothing has been decided." This stance is pretty much contrary to other Kakao affiliates that are known to be preparing for IPOs within the next couple of years.
One of the key reasons behind the difference is that the subsidiary's stakes are mostly held by parent company Kakao, and the e-commerce subsidiary of Kakao's mobile messenger service is not under pressure from investors wanting to cash out. Kakao holds 99.62 percent of Kakao Commerce's shares, while the rest of the minority stakes are held by key company officials, including CEO Hong Eun-taek with 0.22 percent.
Not only is Kakao Commerce not being pressured by investments firms, but the company also has ample cash in reserves ― it had about 400 billion won, as of the end of 2020, and is seeing these pile up with an earning rates exceeding 20 percent.
Meanwhile, seven other Kakao affiliates are preparing for IPOs within the next couple of years, including Kakao Bank, Kakao Pay, Kakao Mobility and Kakao Entertainment. Education platform Yanadoo is also one of Kakao's subsidiaries planning to go public next year.
