Kakao Pay leaps forward with IPO to become the national one-stop-shop platform for all digital financial services
Posted: October 24, 2021 at 6:00 p.m. CDT|Update: 4 hours ago
- Kakao Pay plans to empower users by putting various financial services at their fingertips
- The company saw strong growth in the number of users, partnerships with financial institutions, total volume of transactions and returned
- The proceeds of the IPO will be used in the capital expansion of subsidiaries, strengthening e-commerce partnerships, expansion of payment infrastructure and other drivers of sustainable growth of Kakao Pay.
Seoul, South Korea, Oct. 24, 2021 / PRNewswire / – âOur ultimate goal is to empower users by putting a wide range of financial services at their fingertips simply with Kakao Pay, without having to download multiple apps.
Kakao Pay goes public on November 3 to accelerate its transition to a comprehensive mobile financial services platform.
âKakao Pay is fundamentally a financial platform, and we seek to maintain symbiotic relationships of mutual growth with other financial institutions,â said Alex ryu, CEO of Kakao Pay at the online press conference held on Monday. âAs digital convergence has accelerated in all areas, including online payment and financial services, we expect to significantly increase our market share thanks to an unprecedented number of users and the vast ecosystem of cooperative societies. backed by our superior technology. “
- Kakao Pay Realizes Enterprise Value of “Beneficial Funding” Through IPO
Kakao Pay is offering a total of 17 million shares planning to raise up to 1.530 billion KRW in the IPO. Through the institutional investor bookbuilding process carried out since October 13 to 21, the offer price was set at 90,000 KRW, the upper limit of the price range. Kakao Pay will debut on KOSPI on November 3 after having received the subscriptions from private investors of October 25 to 26. The main underwriters of the transaction are Samsung Securities, JP Morgan and Goldman Sachs, with co-bookrunner Daishin Securities. Korea Investment & Securities and Shinhan Investment will join as co-managers.
- One-stop-shop financial platform completed in seven years with growth in all numbers
Starting with Korea’s first digital payment service, Kakao Pay has grown into a leading mobile financial platform in Korea. Using two distinguished platforms, the Kakao Talk messaging app and the Kakao Pay app, Kakao Pay retains over 36.5 million users with an MAU of 20 million. In addition, the company has more than 127 partnerships with financial institutions, ensuring its strong presence in the market as a financial platform.
Kakao Pay’s total transaction volume is also growing rapidly. The company recorded a total transaction volume of 85,000 billion KRW for twelve months from the second half of last year, and the turnover To exceeded 102% in the last 2 years.
Additionally, one of the biggest competitive advantages of Kakao Pay is that it can create massive synergies with the large Kakao ecosystem.
After gaining a huge user base through easy payment and money transfer services that are efficient traffic generators, Kakao Pay locks these users into the Kakao Pay platform by providing life essential services. day-to-day business such as bill payment, membership, electronic documents and authentication. , explained the company. Kakao Pay provides a wide range of financial and wealth management services with its subsidiaries, including loans, investments and insurance to these acquired users.
Kakao Pay user engagement also continues to strengthen over time. The proportion of users who use 3 or more services in Kakao Pay has increased significantly in 3 years from 21.9% to 55.5%. This suggests that users are expanding beyond traffic building services like money transfer and payment to take advantage of the company’s wide range of financial services.
Based on this performance, Kakao Pay managed to achieve profitability. The company registered 8.2 billion KRW in EBITDA in H1 2021. Digital Finance revenue was only 2% of total revenue in 2019, but increased significantly to 32% in H1 2021, accounting for around a third of revenue total business. Kakao Pay said it will continue to diversify its revenue streams and keep its growth stable.
- Strengthen its growth engine through various growth strategies
To successfully enter the total addressable market (TAM) of Kakao Pay, the company is preparing to launch various new services and functions. To begin with, Kakao Pay will create a digital non-life insurance subsidiary and deliver innovative new insurance products for the digital economy. In addition, Kakao Pay Securities will launch the mobile trading system soon. For the loan service, Kakao Pay aims to offer a value-added credit scoring model for those with insufficient financial records and to diversify its brokerage portfolios of loans such as credit card loans and secured loans. Preparations for Korea’s first combined deferred payment and prepaid mobile transport card designated as an innovative financial service by the Financial Services Commission are also underway.
With the onset of the MyData era, Kakao Pay’s personal financial management service is expected to experience further advancements. By providing personalized analysis service and personalized options, the service will be equipped with better insights into financial assets, in-depth income and expense analysis, working as an AI financial advisor for users’ financial needs.
Kakao Pay’s global expansion will also gain momentum. The company will continue to discover new growth engines that could capture 30,000 billion KRW value of world markets.
Since Kakao Pay’s fintech leadership is based on advanced technology, the company will continue to pursue technical development. Kakao Pay highlighted its intention to use AI and deep learning technology, blockchain-based authentication and biometric recognition technologies to ensure that users can securely use its financial services.
The proceeds of the IPO will be used based on the growth strategies mentioned above. “The funds raised for the acquisition of securities of other companies will be used to develop the securities retail activities and the capital of a digital non-life insurance company, to establish partnerships and to invest in equity. in e-commerce, and mergers and acquisitions of promising fintech companies, âan official said. by Kakao Pay. “The working capital will be used to expand the offline payment infrastructure and to operate the Buy Now Pay Later (BNPL) service.”
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