[Featured Stock] Flitto Rapidly Emerges as Korea's 'Little Nuance' in MS Nuance's 18 Trillion Big Deal... Vanguard of K-Culture

[Asia Economy Reporter Hyunseok Yoo] Flitto is on the rise. It appears that the stock price was influenced after Kakao Entertainment announced that it would invest 1 trillion KRW to build a webtoon platform in all languages for all countries. Flitto is a language-specialized company attracting global attention. Prestigious companies such as Samsung Electronics, LG Electronics, Hyundai Motor Company, Naver, Kakao, Microsoft, Amazon, NTT Docomo, Baidu, Oracle, and Tencent are Flitto’s clients. It was also listed as an ‘Asia-Pacific High Growth Company’ by the Financial Times for two consecutive years.

As of 1:56 PM on the 13th, Flitto was trading at 15,850 KRW, up 5.67% (850 KRW) compared to the previous trading day.

Jinsu Lee, CEO of Kakao Entertainment, said in an interview with foreign media the day before, “We are keeping open the possibility of listing Kakao Entertainment both in Korea and the United States and are reviewing all options.”

Kakao Entertainment is Kakao’s flagship content subsidiary. It was launched in March after the merger of KakaoPage, a webtoon and web novel platform, and Kakao M, which produces and distributes music, video, and entertainment content. Kakao Entertainment is expanding its scale ahead of its IPO. CEO Lee said, “Kakao Entertainment’s goal is to build a webtoon platform in all languages for all countries,” adding, “We plan to spend 1 trillion KRW this year alone to acquire domestic and overseas assets.”

Kakao’s plan to build a webtoon platform in all languages is expected to benefit significantly from Flitto’s assets. Flitto supports 25 languages in 173 countries worldwide and has accumulated over 10 million users to date. Three million translators worldwide are active on Flitto. More than 2,000 partner companies use the service. The cumulative number of translations exceeds 40 million.

The language data business sector is an area of interest for global content companies. Flitto has amassed enormous data across various fields. The Thousand Character Classic, which can express all meanings and consists of 1,000 characters, is dwarfed by Flitto’s database of over 100 million sentences. The number of possible combinations increases even further. Flitto collects language data daily, including not only text but also voice pronunciations and images.

Microsoft’s acquisition of Nuance Communications, an AI and speech recognition technology company, for $16 billion (approximately 18 trillion KRW) could be a significant event in reevaluating Flitto’s corporate value.

Microsoft announced it would acquire Nuance at $56 per share. This acquisition price includes a 23% premium over Nuance’s closing price on the 9th. Including debt, the acquisition size is $19.7 billion. It is Microsoft’s second-largest acquisition after LinkedIn in 2016 ($26 billion). Nuance, founded in 1992, is a specialist in AI and speech recognition technology. It is well known that Nuance’s technology is used in Apple iPhone’s voice recognition software Siri.