[Exclusive] SmartStudy of 'Pinkfong Baby Shark' Pursues Acquisition of Gaia Corporation to Accelerate IPO

Yujin Robot Subsidiary 'Discussing Acquisition of Comprehensive Toy Company Gaia Corporation' Details Being Coordinated
Sales Increase Through IP Value and Goods Business Expansion "Accelerating Listing Process"... Considering KOSPI in Korea and NASDAQ in the US

[Asia Economy Reporter Lee Seon-ae] Following its position as the most-viewed video on YouTube worldwide, "Pinkfong Baby Shark" has surpassed 9 billion cumulative views. This figure far exceeds the global population of 7.875 billion announced by the United Nations Population Fund (UNFPA) last April. Having also secured YouTube's "Ruby Button"?a first for a domestic infant and child brand (refer to our exclusive report on June 22 titled [Exclusive] Baby Shark's 1 Trillion Won Valuation and Ruby Button)?"Pinkfong Baby Shark" has proven the strength of K-content in the global market, and preparations for its IPO are now in full swing.

SmartStudy is pursuing the acquisition of Gaia Corporation, a comprehensive toy company. Gaia Corporation has maintained a continuous collaborative relationship by producing toys for SmartStudy’s infant and child content brand "Pinkfong." Through this acquisition, SmartStudy plans to solidify its position as a unicorn company (a private company valued at over 1 trillion won) and accelerate its IPO process.

According to the investment banking (IB) industry on the 29th, it has been confirmed that SmartStudy is in discussions to acquire Gaia Corporation. A tentative agreement on the acquisition has been finalized, and detailed terms are currently being negotiated. SmartStudy’s push to acquire Gaia Corporation aims to strengthen its intellectual property (IP) and merchandise business to maximize revenue growth. Consequently, the IPO process is expected to gain momentum.

Gaia Corporation, led by CEO Na Won-seok, was established in August 2010 and is a manufacturer and seller of toys and infant products. The company has distributed toys featuring famous domestic and international animation characters such as Disney, Pixar, Marvel, the animated film series "Cars," "Frozen," and the transforming robot toy "DinoCore." As of the end of last year, the largest shareholder was Eugene Robot (50.25%), with CEO Na holding a 29.79% stake in Gaia Corporation.

An IB industry insider stated, "Gaia Corporation is a comprehensive toy company that has built competitiveness by producing toys for various brands beyond Pinkfong." They added, "SmartStudy plans to accelerate its IPO process by expanding its IP domain and strengthening its merchandise business through the acquisition of the toy company." The insider further noted, "Gaia Corporation will also benefit from joining SmartStudy, enabling it to enter the global toy market, which is expected to create significant synergy." Regarding this, SmartStudy officially stated, "Nothing has been confirmed concerning the acquisition."

SmartStudy is expected to use the acquisition as a stepping stone to speed up its IPO process. With overseas sales accounting for 80% of its revenue, SmartStudy is considering listing on both the domestic KOSPI market and the U.S. NASDAQ market.

Notably, in the first half of this year, institutional investors in SmartStudy converted all their redeemable convertible preferred shares (RCPS) into common shares. This conversion means that investors have waived their redemption rights to recover their investment and instead intend to exercise shareholder rights. This is generally interpreted as a sign that an IPO is imminent. A venture capital (VC) industry official explained, "The timing when institutional investors convert their invested RCPS into common shares in unlisted startups usually coincides with an increase in the company's value and the visibility of an IPO." However, SmartStudy stated, "The decision on whether to go public has not been finalized. We will prioritize the company’s continuous growth and review the matter from multiple perspectives."

If SmartStudy’s initial public offering (IPO) materializes, it is expected to become the first animation content startup in Korea with a corporate value in the trillion-won range. Currently, the market values the Pinkfong Baby Shark IP at 1 trillion won, and this value is expected to rise further. SmartStudy is creating additional value by expanding the IP into animation, theater, and film. The company has collaborated with over 500 domestic and international companies, including LG Electronics, Nongshim, Yanolja, Kellogg’s, Crocs, and Crayola, signing more than 1,000 licensing contracts. Recently, SmartStudy partnered with the world’s largest kids’ channel, Nickelodeon, to begin producing the 2D animation series and film "Baby Shark Big Show." "Baby Shark Big Show" is an animation series launched in March through a partnership between SmartStudy and Nickelodeon. The series, which aired on the U.S. Nickelodeon channel, ranked first in viewership among children aged 2 to 5 on its premiere day and has been broadcast worldwide in countries including the UK, Italy, and Australia. Buoyed by its global success, the two companies plan to produce a second season of the animation and develop "Baby Shark Big Show" into a feature film.