Kakao’s digital banking unit plans to raise $2.3 billion through an initial public offering (IPO) on the Korea Exchange. This is as the Korean internet giant continues expanding its digital offerings.
According to Monday’s filing with the Korean Financial Supervisory Service, 65.45 million shares are offered by Kakao Bank, a five-year-old unit. The price range is 33,000 won to 39,000 won per share. Kakao Bank, valued at approximately $16.4 billion, will be the highest value in the range. The subscription period will run from July 26 to July 27. The shares will debut on the Korea Exchange in August.
Kakao Bank reported that revenue increased 17% to 225billion won in the first quarter of this year compared to the same period last, while net income rose 153% to 47billion won.
Kakao’s latest unit, the digital bank company, is now public. Kakao Games went public in September and raised $320 million. According to media reports, Kakao’s ride-hailing and fintech units, as well as digital cartoon and fintech, are all set to go public.
Kakao shares have shot up since the coronavirus pandemic, as more people work, play and live online. Kakao shares have risen more than 400% in the past three months. Kim Beomsu, the founder and chairman of Kakao, became the richest person in Korea due to the share price increase. Kim is currently worth $15.1 billion, according to the Real-Time Billionaires List. This is almost $3 billion more than Celltrion cofounder Seojung-jin, Korea’s richest individual but now ranks No. 2.
“The Covid-19 pandemic has accelerated Kakao’s expansion due to rapid growth in demand online services,” Rajiv Biswas (Asia-Pacific chief economist, research firm IHS Markit) told Forbes.
Kakao, which launched its first business in Korea in 2010 as a mobile messaging application, has grown to be one the most important business groups in Korea, along with the family-owned conglomerates known collectively as chaebol. According to Dongkeun Yi (an analyst at Counterpoint Research), KakaoTalk has 45 million users and nearly 95% of the domestic market.