Naver Invests Additional 400 Billion KRW in US Webtoon Subsidiary...Significantly Expands Global Business Scope

[Asia Economy Reporter Kang Nahum] Naver has participated in a paid-in capital increase of Webtoon Entertainment, which is in charge of its webtoon business in the United States, investing approximately 400 billion KRW. This move is interpreted as an effort to expand its global webtoon business centered on the U.S.

◆ 400 billion KRW invested in the U.S. headquarters corporation = On the 28th, Naver acquired 245,000 shares of Webtoon Entertainment. The acquisition amount was 397.5 billion KRW, and the number of shares owned after acquisition is 2,185,305 shares. The shareholding ratio is 67.39%.

Webtoon Entertainment is Naver’s U.S. corporation overseeing the webtoon business. Through a governance restructuring last year, Naver arranged for Webtoon Entertainment to oversee domestic and overseas webtoon businesses, with subsidiaries operating webtoon businesses in Korea, Japan, China, and other countries. Recently, Webtoon Entertainment has been focusing on expanding its global business centered on the U.S. by partnering with three domestic and international video production studios, including Hollywood film and TV production company Vertigo Entertainment.

Naver’s increased investment in the webtoon business aligns with CEO Choi Soo-yeon’s plan to strengthen global operations. CEO Choi Soo-yeon stated during the Q1 earnings conference call, “Webtoons, which are growing mainly in the U.S., are actively pursuing monetization based on 180 million global users,” adding, “We are introducing domestically proven growth strategies and business models in Japan, where the market size is larger than Korea, and in the U.S., where monetization is at an early stage.”

◆ Direct investment in webtoon-based films and series = Naver’s choice of the U.S. as a major base is due to the growth potential of the U.S. market. Naver Webtoon, which surpassed 10 million monthly active users (MAU) in the U.S. in 2019, currently records 15 million MAU, expanding its ecosystem.

Naver is expected to increase investment in secondary video adaptations of webtoons to maximize profits. Last year, Naver established ‘Wattpad Webtoon Studio’ and invested 100 billion KRW in a video production fund.

Kim Nam-sun, Naver’s Chief Financial Officer (CFO), said, “In the past, Naver Webtoon did not directly invest in secondary video adaptations, but from now on, we will aggressively invest in production,” adding, “Naver has a higher level of quantitative measurement of the success of webtoon video adaptations than any production company, so selecting and investing in good works will significantly increase their value.”