Kakao Pay, a fintech company, has applied for preliminary approval for an IPO, the Korea Exchange announced on Monday.
Kakaopay, a unit of Kakaocorp, South Korea’s largest mobile instant messaging service provider, offers financial services including money transfer, savings accounts and asset management.
The move by Kakao Pay clearly did not meet market expectations. Previously, it was widely expected that Kakao Pay would consider secondary markets and even foreign listings. Kakao Pay plans to issue 133 million shares, including 20 million new shares, according to the filing.
Since it will take about 45 days to review a stock market listing, Kakao Pay could go public as early as July, even before Kakao Bank filed an IPO on April 15.
Kakao is Kakaopay’s largest shareholder with a 56.1 percent stake at the end of 2020, according to Kakaopay regulatory filings. Kakaopay’s second largest shareholder is Alipay, a subsidiary of China’s Ant Financial, with a 43.9 per cent stake. In 2017, Ant Financial Services Group invested $200 million in Kakaopay, connecting Alipay’s 34,000 merchants in South Korea.
Analysts estimate that Kakao Pay could have an enterprise value of Won10tn ($9bn) to Won18tn.
Kakao Pay also considered overseas listing options before deciding to list on the South Korean exchange, the people said.
Kakao was founded in 2004 when it merged with Daum, South Korea’s second-largest web portal, and went public indirectly, changing its name to Daum Kakao. In addition, Kakao acquired US private social service Path in 2015 and a 76.4 per cent stake in South Korean record label Loen Entertainment in 2016. Kakao is well-known in South Korea, where online payments have gained over 48 million users worldwide, and its Kakao Talk is the country’s most popular instant messaging software, reaching more than 97% of its smartphone users.
Launched in 2014, Kakaopay is Kakao’s South Korean mobile payment and digital wallet service that allows users to make mobile payments and online transactions. The service supports contactless payments using near field communication and QR codes. Kakaopay has been incorporated into Kakao’s mobile instant messaging program, KakaoTalk.
Kakaopay is suitable for online stores and physical stores. It mainly provides online shopping, bill payment, insurance, loan, investment and other related services for Korean consumers.