Korean online payment service Kakao Pay rises nearly 114% in first day of trading.
Shares of Kakao Pay, the fintech unit of South Korea’s largest messaging app operator Kakao Corp, closed up 114% on its market debut on Wednesday.
The company backed by Ant Financial ended the first day of trading at $ 163.3 (193,000 won), securing a market capitalization of $ 21.2 billion.
Shares of Kakao Pay rose to $ 194.6 (230,000 won) on the KOSPI, up 155.6% from the issue price of $ 76.2 (90,000 won), the upper limit of its initial public offering range. .
Kakao Pay raised $ 1.3 billion (1.53 trillion won) at a valuation of $ 9.9 billion, offering 17 million new shares in its initial public offering last week.
The gains for Kakao Bank came amid a crackdown on the country’s tech companies by South Korean regulators and politicians. In September, local lawmakers accused the country’s big tech companies, including Kakao Pay’s parent company Kakao Corp, of their dominance of the market. Lawmakers have also raised concerns about the growing power and valuation of tech companies in Korea.
Kakao Pay had to delay its listing twice this summer as the Financial Supervision Service (FSS) asked Kakao Pay to lower the price and valuation of its shares. The company cut about 6% of its target initial public offering to $ 1.3 billion from $ 1.63 billion in July.
Kakao Pay will use the proceeds from its IPO to accelerate its global expansions, including Southeast Asia, Europe and China, CEO Alex Ryu said at an online press conference last week. Companies based in Southeast Asia and the Middle East have approached the fintech company to seek strategic partnerships, Ryu said. It will invest in artificial intelligence, cloud, robo advisor, blockchain-powered fintech companies in South Korea and overseas countries after listing, Ryu added.
“Kakao Pay is fundamentally a financial platform and we seek to maintain symbiotic relationships of mutual growth with other financial institutions,” said Ryu.
The company also plans to expand the offline payment infrastructure, operate the Buy Now Pay Later (BNPL) service, establish a digital non-life insurance subsidiary and launch the mobile commerce system (MTS).
Kakao Pay, founded in 2014, has a total of 36.5 million users, with 20 million monthly active users. The company’s total transaction volume recorded $ 72.4 billion over the twelve months to June, while its revenue increased more than 102% in the past two years during the pandemic. Kakao Pay posted $ 6.9 million (8.2 billion won) in EBITDA in the first half of 2021.
Kakao Pay said one of its differentiators is creating synergies with its sister companies such as the Kakao messaging app, Kakao Bank, Kakao Mobility, and Kakao Games.
Kakao Mobility and Kako Entertainment will also go public in 2022.
Kakao Corp’s digital lender subsidiary Kakao Bank, which raised $ 2.3 billion through the IPO in August, had a market capitalization of $ 23.9 billion (28 trillion won) as of today.