[Person人] 30x Increase in Corporate Value in 4 Years... Beyond Fintech, Challenging as a 'Financial Giant'

Ryu Young-jun, CEO of Kakao Pay, Dreams of a 'Comprehensive Lifestyle Financial Service'
Developer-Turned-Financier... Repeated Challenges with 'User Convenience' as the Key Theme
June: Milestones Including MyData, Preliminary IPO Review, and Digital Insurance Company

[Asia Economy Reporter Kiho Sung] A 30-fold increase in value over four years. Ryu Young-jun, who has led Kakao Pay and dominated the domestic simple payment market, is regarded as the most influential figure in the rapidly changing fintech market.

Symbolizing CEO Ryu, who entered the financial industry in 2017 by separating the fintech business division from Kakao and becoming the CEO of the independent corporation Kakao Pay, is the overwhelming ‘numbers’. Kakao Pay’s revenue in its first year was only 10.6 billion KRW. By 2020, revenue had reached 284.4 billion KRW, growing about 27 times in three years.

Kakao Pay has rapidly expanded its influence based on the popularity of the widely used platform KakaoTalk. In 2015, just one year after its launch, it had 5 million users, but the current cumulative number of subscribers reaches 36 million. This accounts for 69% of South Korea’s population (52 million), and considering the 37 million population aged 15 to 64, it means almost all smartphone users have signed up. For platform companies, the number of users is money. A certain level of users and data accumulation is necessary for operating profit to increase. In fact, Kakao Pay recorded an operating loss of 96.5 billion KRW in 2018, but it sharply decreased to 17.9 billion KRW in 2020.

Company Valuation Estimated Up to 18 Trillion KRW... Surpassing Commercial Banks

Industry experts predict that Kakao Pay will become a giant in finance, surpassing fintech and big tech companies. In fact, the securities industry estimates Kakao Pay’s company valuation to reach up to 18 trillion KRW in the second half of the year. This exceeds Hana Financial Group’s market capitalization of 13.96 trillion KRW, and considering that Kakao Pay’s valuation was 580 billion KRW at the time of its spin-off from Kakao, its value has increased up to 30 times in four years.

CEO Ryu boasts a unique background as a developer-turned-executive and a computer engineering graduate turned financier, a combination rarely found elsewhere. After graduating from university and graduate school in computer engineering, he worked at Samsung SDS and joined Kakao from its early days. His hit work as a developer was ‘Kakao Voice Talk’. At a time when voice calls were the norm, Voice Talk, which used data, was considered revolutionary.

His challenge to the simple payment market also started from his philosophy of ‘user convenience’. CEO Ryu revealed that the background of developing Kakao Pay was because the payment process was too complicated whenever he used the KakaoTalk gift-giving corner, so he decided to create it himself.

His proactive problem-solving tendency also influenced his appointment as chairman of the Korea Fintech Industry Association. Although Voice Talk received favorable reviews after development, it caused conflicts with telecom companies. Similarly, Kakao Pay’s system development did not take much time, but more effort was spent persuading card companies. Based on these experiences, as chairman of the Fintech Industry Association, he actively conveys the fintech industry’s opinions by visiting the National Assembly and other institutions.

Born in 1977, CEO Ryu engages in open communication within the company, reflecting his relatively young age. He is actively involved in communicating with employees, even personally conducting training for new hires. In line with Kakao’s corporate culture of calling each other by English names without titles, he is called ‘Alex’ within the company. In fact, even Kakao Pay employees find the name ‘Ryu Young-jun’ somewhat awkward.

Kakao Pay’s Rapid Growth Over Four Years Since Founding... Drawing Attention from the Financial Industry

Marking the fourth anniversary of his appointment as CEO alongside Kakao Pay’s founding, CEO Ryu recently overcame a major hurdle. The shackles of the suspension of the MyData (personal credit information management) review, one of this year’s long-cherished projects, have been lifted. The risk posed by the Chinese major shareholder, which had been a stumbling block, has been effectively resolved. If the MyData project had continued to face difficulties, it would have inevitably had a negative impact on the planned initial public offering (IPO).

The full-scale implementation of the MyData business and the preliminary review results for listing on the stock exchange, the first hurdle of the IPO, are scheduled for this month. Kakao Pay submitted the application at the end of April, and if there are no delays in the review process, the results are expected by the end of this month.

Additionally, Kakao Pay applied for preliminary approval to establish a digital non-life insurance company with the Financial Services Commission at the end of last year and is awaiting the results. Although delayed compared to the schedule, the industry expects the results to be announced within this month. Once CEO Ryu’s new challenge is completed, Kakao Pay will evolve once again into a comprehensive lifestyle financial service, adding investment, insurance, and loans to its existing services such as payment and remittance.

On the occasion of Kakao Pay’s fourth anniversary last April, CEO Ryu told employees, “I am already looking forward to what we will look like at the fifth anniversary.” This is a declaration that this year will be a turning point for both Kakao Pay and CEO Ryu. This is why the entire financial industry, beyond fintech, is paying attention to CEO Ryu’s moves.