S Korean fintech major Kakao Pay files for up to $1.4bn IPO

Kakao Pay, South Korea’s financial technology major, has filed to raise up to W1.6 trillion ($1.4 billion) in an initial public offering (IPO) on the Korea Composite Stock Price Index (KOSPI).

In a press statement, Kakao Pay said it plans to offer a total of 17 million shares at an indicative range between W63,000 to W96,000 won per share.

The company is planning to raise up to W1.632 trillion at the upper limit of the price band through IPO.

Kakao Pay, which is backed by Chinese e-commerce company Ant Group, said in a regulatory filing that the offering price will be fixed after the book-buildig process from the institutional investors on July 29 and 30.

Based on schedule, Kakao Pay’s KOSPI debut will be on August 12, after receiving subscriptions from retail investors for two days from August 4 to 5.

The main underweriters for the deal are Samsung Securities, JP Morgan, and Goldman Sachs, with co-underwriter Daishin Securities.

Established as an independent corporation in April 2017, Kakao Pay introduced South Korea’s first simple payment service in September 2014. The company has accumulated over 36 million registered users.

Its annual transaction volume reached W67 trillion last year, recording W22.8 trillion for the first quarter of this year.

The company provides payment-related services such as payment, money transfer, membership, e-documents, and authentications. It has launched various financial services such as investment, insurance, loans, and wealth management.

For this year, the company plans to launch a digital non-life insurance business and open Mobile Trading Systems in its investment service.

In the first quarter of 2021, the company’s consolidated sales reached W107.1 billion, with W10.8 billion in its consolidated operating profit.

Kakao Corp is the largest shareholder of Kakao Pay Corp, with 55%. Ant Group’s Alipay is the second-largest shareholder with 45%.

Kakao Pay has been in a strategic alliance with Alibaba since its inception. When Kakao Pay was launched in 2017, it received an investment of $200 million from Alipay Singapore Holding, a subsidiary of Alipay operator Ant Financial.

In June 2020, it got another fresh injection of about $97 million from the Chinese investor.