Korean Fintech Kakao Pay all set for public offering

Korean Fintech Kakao Pay all set for public offering

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Kakao Pay, the fintech payments arm of Kakao Corp., is all set for its IPO on the Korean stock market soon. The actual public offering is expected to arrive in H1 2021, and the company is likely to be valued at approximately $8.5b.

To succeed, Kakao Pay has hired KB Securities, a local brokerage, to guide the company through the IPO process. The company has also asked the Korean financial watchdog, the Financial Supervisory Service to act as an auditor.

However, it is not clear whether Kakao Pay would enter the Korea Composite Stock Price Index (KOSPI) or the Korean Securities Dealers Automated Quotations (KOSDAQ). For clarity, KOSDAQ modelled after the USA’s NASDAQ, and Kakao Pay fits the requirements of both indices.

“We are preparing to go public in the first half of next year. By raising capital, we’ll secure new growth engines and seek business growth,” said a Kakao Pay official. The fintech platform is planning to use the upcoming investments to add a digital insurance unit to its portfolio in addition to the insurance and securities divisions.

While Kakao Corp is the prime shareholder of  Kakao Pay, with a  56.1% stake, Chinese tech giant Alibaba owns 43.9% of the company via its financial arm, Ant Financial.

Since its inception in 2017, Kakao has reaped heavily in South Korea. It has acquired a large customer base, totalling more than 30 million users, and has handled almost $25b in transactions to date.

Mobile-payments boom

With the ongoing coronavirus pandemic, global markets have embraced mobile payment services. Correspondingly, the approach has decreased the use of physical fiat currency. Factually, digital payments are increasingly gaining traction today.

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