Kakao Pay expected to go public on Kospi in July

[Photo provided by Kakao Pay]

Kakao Pay, financial service unit of South Korea’s mobile messenger giant Kakao Corp., will open up the Korean IPO pipeline for the second half in much fanfare.

Kakao Pay on Monday filed its IPO prospectus to the Korea Exchange. IPO lead managers are Samsung Securities, Goldman Sachs, and JP Morgan, and co-underwriter Daishin Securities.

It is expected to pass review in late June and arrange book-building session in the following month.

Kakao Pay that debuted the country’s first simply pay system in September 2014 has sprawled business to traditional realm of investment, insurance, lending and asset management. It was spun off from its parent in April 2017.

Last year, Kakao Pay launched Kakao Pay Securities as an online-only brokerage house. It also filed for preliminary approval with the Financial Services Commission in January to set up digital non-life insurance firm.

Industry estimate for company is around 10 trillion won ($9 billion). Meritz Securities estimated it to be at 9.6 trillion won, NH Investment & Securities and Kyobo Securities each 10.3 trillion won. EBest Investment Securities puts its value at 18 trillion won, given its expansion. .

Kakao Pay oversaw 67 trillion won in annual transactions, up 36.7 percent from 49.1 trillion won in 2019. It has around 36 million users.

Its bottom line has also improved.

Kakao Pay saw its sales double from 141.1 billion won in 2019 to 284.4 billion won in 2020. Its net loss narrowed from 65.1 billion won to 25 billion won during the same period.

Kakao Pay follows the business model of China’s Ant Group, which started out as a simple payment service provider of Ali Pay and has successfully expanded business to lending, investment, and insurance. Ali Pay Singapore Holdings under Ant Group is the second-largest shareholder of Kakao Pay.

Shares of its parent Kakao finished 2.97 percent higher at 121,500 won on Tuesday.

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