Kakao Pay to speed up global expansion after IPO and removed regulatory uncertainty
“We’re aiming to provide various financial services easily and conveniently through an integrated platform of Kakao Pay. Based on our large user base, convenient and safe service with technical prowess, we’ll maintain competitiveness over others,” said Ryu Young-joon, CEO of Kakao Pay during the online IPO press conference on Monday.
Kakao Pay at the end of September delayed its IPO schedule due to suspended sale of some products following the regulatory moves to curb its fintech business expansion. It denied regulations would dampen business and stock prospects.
“Kakao Pay suspended services like insurance and reorganized others, all under close cooperation with the authority to reduce the regulatory uncertainty,” said Shin Won-keun, chief strategy officer at Kakao Pay. “We see regulations governing the platform business as an opportunity factor, not a constraint, and thus we’ll evolve our own way of working in sync with the authority’s regulatory moves while bringing more credibility from users for larger growth.”
As for the transaction fees, Kakao Pay set its fee at minimum ratio but has room for another cut, said its chief business officer Lee Jin.
“Still, the transaction volume is growing fast and thus the profitability would not be affected,” Lee emphasized.
The fintech company plans to use the proceeds from IPO to strengthen its growth engines. The mobile trading service coming out later this year or early next year will reflect the needs of Kakao Pay users hoping more convenient trading and investment of domestic stocks, foreign stocks and ETFs.
Digital non-life insurance service will also be launched by early next year as it is readying to file for an application after receiving a preliminary nod from the authority in June last year.
Kakao Pay aims to go global by expanding business partnership with foreign fintech companies. It is planning to use some of the IPO proceeds to seek for M&A opportunities in the 30 trillion won ($25.7 billion) worth global market.
Kakao Pay started the mobile payment service for the first time in Korea in 2014. Its cumulative users topped 36.5 million as of the end of June, with monthly active users of 20 million. Yearly revenue has expanded by an average 102 percent for the past two years.
On the back of the growth, the company in the first half successfully returned to a profit, and its earnings before interest, taxes, depreciation, and amortization (EBITDA) reached 8.2 billion won.
Kakao Pay kicked off its two-day public subscription for an IPO on Monday to debut 17 million shares worth 1.5 trillion won on the main Kospi on Nov. 3. The entire IPO issue for retail subscription will be allotted uniformly for the first time in the country’s IPO history to distribute the shares equally to all those who make the minimum subscription deposit to add appeal to retail investors.
Kakao shares on Monday closed 1.18 percent lower at 126,000 won in Seoul trading.
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