Kakao is an internet company that was founded back in 2014 and is bade in South Korea. It came out about due to a merging with Daum Communications and has so far raised around $1 billion in funds through a global depositary receipts (GDR) sale in which to invest in overseas artificial intelligence (AI) firms.
“Strengthening overseas service content and securing AI technologies are the most important factor for the next generation platform competition [for Kakao]”, said Kim So-hye, an analyst at Hanwha Securities.
Already Kakao has around 50 million active monthly users. And now in addition to its online services, the internet company is looking to expand its services to offline commerce too. The way it will do this is through is mobile messaging platform in South Korea. Kakao also runs a successful web-only bank that’s popular in South Korea currently and also offers both navigation and car hailing services too.
It’s not just South Koreans that Kakao want to offer its services too. The company is also trying hard to get into overseas markets too, particularly Southeast Asia, but is yet to create a strong presence there.
Earlier this week the offer of around 8.3 million GDRs was valued at $121 each. This was 3.7% less than Kakao’s closing price of 134,000 Won and was by far the biggest overseas funding that’s come from a South Korean company through GDR’s in over 10 years. The deal was arranged by Goldman Sachs and Citigroup.
“Now that it has secured a strong war chest for global acquisitions, it can secure more cutting-edge technologies for further growth,” said one of the investment bankers involved in the deal. The value of Kakao’s shares rose 1.12% earlier this week, outdoing a mealy 0.25% rise in the Kospi Composite index benchmark.
As well as being a successful internet company Kakao also owns a very popular messaging app in South Korea. And more recently its been expanding its mobile service offerings, as well as offering video-on-demand streaming services, cartoons, and ebooks. It also owns a Korean online music streaming service operator which it bought in 2016 for 1.87 trillion Won ($1.7 billion). As well as that it has an 8.84% share in a South Korean cryptocurrency exchange operator. For now it will continue to raise funds to further help overseas AI projects.