Kakao Cuts 19 Affiliates in One Year, Continues 'Selection and Focus' Strategy

128 Affiliates as of May... 19 Fewer Compared to Previous Year

Kakao has continued its 'selection and concentration' strategy to strengthen core business competitiveness by reducing nearly 20 affiliates in one year.

According to the Fair Trade Commission's announcement as of the 14th, the total number of Kakao affiliates is 128. This is a decrease of 19 compared to the same period last year (147 companies). Compared to when Kakao released the '2023 Second Half Corporate Group Description (138 companies)' last December, the number of affiliates has decreased by 10.

Notably, the number of other affiliates not classified as core businesses decreased by 7. This is the result of streamlining the organization by disposing of affiliates unrelated to core businesses.

According to the '2024 First Half Corporate Group Description' recently disclosed on the company's website, the detailed status of affiliates can be confirmed. Kakao classifies its core businesses into categories such as ▲a global cultural ecosystem through the combination of intellectual property (IP) and IT ▲future growth engines centered on artificial intelligence (AI) and healthcare ▲digital transformation for everyday innovation. Companies included in these three categories total 110, accounting for 86% of the Kakao corporate group.

Among them, companies included in the 'global cultural ecosystem through IP-IT combination' category, such as Kakao Entertainment and Kakao Games, number 80, accounting for 63% of the total. These affiliates are challenging the global market and strengthening competitiveness based on the synergy of K-content IP and platforms such as webtoons, web novels, and games. To this end, they are building a content ecosystem that includes video production companies, webtoon and web novel content providers, management companies, and game developers.

Companies related to 'future growth engines centered on AI and healthcare' include Kakao Brain, Kakao Enterprise, Kakao Healthcare, Ground X, Kakao Ventures, and Kakao Investment, totaling 7 companies and accounting for 5% of the total. Kakao is actively investing in AI and healthcare fields to discover sustainable future growth engines. It is also actively investing to revitalize the startup ecosystem.

In addition, companies related to 'digital transformation for everyday innovation,' such as fintech, mobility, and commerce, number 23, accounting for 18% of the total. Kakao is helping digital transformation so that users and partners can enjoy the benefits of digital technology more conveniently and efficiently through its platform.

Kakao plans to continue integrating affiliates to expand synergy among affiliates and strengthen core business capabilities. A recent example is Kakao's acquisition of major businesses of Kakao Brain to strengthen AI competitiveness, a future core business of Kakao.

Meanwhile, Kakao has been striving to enhance transparency in corporate management by publishing business reports, ESG reports, and governance reports. Despite having no separate disclosure obligations, Kakao has been issuing the 'Corporate Group Description' twice a year since 2022 to advance governance transparency and actively communicate with society about Kakao's future strategies, business directions, and corporate structure.