"KakaoPay Achieves Listing After Three Attempts, Aiming to Be a National Life Finance Platform" (Comprehensive)

Strengthening MTS, Insurance, and Loan Brokerage... Exploring Overseas Expansion Opportunities
Listing on KOSPI on the 3rd of Next Month... Korea's First 100% Equal Allocation of IPO Shares

Ryu Young-jun, CEO of Kakao Pay, delivering opening remarks at the IPO press conference held online on the 25th. (Photo by Kakao Pay)

[Asia Economy Reporter Jin-ho Kim] After three attempts, KakaoPay succeeded in going public and expressed its ambition to transform into a national lifestyle financial platform by strengthening insurance, investment, and loan brokerage services. KakaoPay will be listed on the Korea Composite Stock Price Index (KOSPI) on the 3rd of next month.

On the 25th, at an online initial public offering (IPO) press conference, KakaoPay CEO Ryu Young-joon stated, "The ultimate goal is to enable users to easily and conveniently enjoy various financial services with just KakaoPay, without needing to use multiple apps."

CEO Ryu emphasized, "We plan to actively explore opportunities such as launching a mobile trading service (MTS), establishing a digital non-life insurance company, and expanding overseas. Based on overwhelming user numbers, convenience, stability, and technological capabilities compared to competitors, we will increase our market share."

KakaoPay succeeded in listing on KOSPI after three attempts. Previously, the listing was postponed twice due to controversies over overvaluation and regulatory impacts on financial platforms. In response, CEO Ryu and the management team devoted significant time during the conference to emphasize the sustainability of KakaoPay's growth drivers.

KakaoPay announced plans to target a market worth 46 trillion KRW by developing various new services and convenience features. KakaoPay Securities' MTS is currently in preparation, and early next year, through the launch of a digital non-life insurance company, it will provide lifestyle-oriented insurance products and services.

In the loan brokerage sector, KakaoPay plans to utilize its self-developed alternative credit evaluation model to offer financial service opportunities to people with limited financial history. Following credit loan products, it will sequentially introduce jeonse (key money deposit) loans, mortgage loans, and card loans.

In line with the full implementation of MyData, KakaoPay will also enhance its asset management services. CEO Ryu explained, "We will provide users with personalized analysis services, acting as a 'mobile asset management advisor' by offering asset status inquiries and financial product recommendations based on income and expenditure analysis." The strategy is to enable anyone in the nation to access private banking (PB) services through KakaoPay.

KakaoPay plans to explore business opportunities targeting the overseas market worth 30 trillion KRW by partnering with global fintech companies. To discover sustainable growth drivers, it will actively pursue mergers and acquisitions of promising fintech firms. Shin Won-geun, KakaoPay Chief Strategy Officer (CSO), said, "We plan to expand into China, Southeast Asia, and Europe in line with the post-COVID era. After listing, we intend to strengthen financial platform cooperation, especially in Southeast Asia."

The company also addressed various controversies surrounding KakaoPay. Regarding concerns about monopolies involving big tech, CEO Ryu responded, "KakaoPay is a platform connecting users and multiple financial companies. We will conduct business in a way that benefits both financial companies and the platform." CSO Shin added, "Strengthening regulations on platforms will be a new opportunity to gain financial consumer trust. We are preparing strict consumer protection measures in line with financial authorities' guidance and expect to grow significantly based on this."

Regarding the suspension of some services due to the Financial Consumer Protection Act, CSO Shin stated, "Since it is the early stage of the act's enforcement, we temporarily suspended services involving consumers who violated the law. We will decide on resumption after legal review." He added, "Since we have been discussing this with financial authorities, we believe the risks related to the act have been resolved."

Starting with simple payments in 2014, KakaoPay had a cumulative subscriber count of 36.5 million and a monthly active user (MAU) count of 20 million as of the end of June this year. The transaction volume over the recent 12 months from the second half of last year to the first half of this year reached 85 trillion KRW, and revenue has rapidly grown at an average annual rate of 102% over the past two years.

Based on these achievements, KakaoPay turned profitable in the first half of this year. EBITDA (earnings before interest, taxes, depreciation, and amortization), an indicator of cash-generating ability from business operations, reached 8.2 billion KRW. Notably, the revenue share from financial services, which was only 2% in 2019, rose to 32% in the first half of this year.

Meanwhile, KakaoPay will conduct a general subscription for two days starting today and will be listed on the 3rd of next month. KakaoPay plans to allocate 100% of the public offering shares reserved for general subscribers equally. The minimum subscription is 20 shares, and anyone with a subscription deposit of 900,000 KRW can become a KakaoPay shareholder.