Shares of Kakao Pay, the fintech unit of South Korea’s largest messaging app operator, Kakao Corp, closed up 114% when it debuted in the market on Wednesday.
The company backed by Ant Financial finished the first day of trading at $ 163.30 (193,000 won), securing a market cap of $ 21.2 billion.
Kakao Pay shares soared to $ 194.60 (230,000 won) on KOSPI, up 155.6% from the issue price of $ 76.20 (90,000 won), the upper end of its IPO range.
Kakao Pay raised $ 1.3 billion (1.53 trillion won) at a valuation of $ 9.9 billion, offering 17 million new shares when it went public last week.
The Kakao Bank gains came amid a crackdown on the country’s tech companies by South Korean regulators and politicians. In September, local lawmakers accused the country’s big tech companies, including Kakao Pay’s parent company, Kakao Corp, of monopoly problems. Lawmakers have also expressed concerns about the growing power and valuation of tech companies in Korea.
Kakao Pay had to delay its listing twice this summer, the Financial Supervisory Service (FSS) having asked Kakao Pay to reduce the price and valuation of its share. The company cut about 6% of its targeted IPO to $ 1.3 billion, from $ 1.63 billion in July.
Kakao Pay will use the proceeds from its IPO to accelerate its global expansion, especially in Southeast Asia, Europe and China, CEO Alex Ryu said at an online press conference last week. Companies based in Southeast Asia and the Middle East have contacted the fintech company to seek strategic partnerships, Ryu said. It will invest in AI, cloud, robot advisers and blockchain technology companies in South Korea and overseas countries after listing, Ryu added.
“Kakao Pay is fundamentally a financial platform, and we seek to maintain symbiotic relationships of mutual growth with other financial institutions,” said Ryu.
The company also plans to expand its offline payment infrastructure, operate a Buy It Now, Pay Later (BNPL) service, create a digital non-life insurance subsidiary, and launch a mobile trading system. (MTS).
Kakao Pay, founded in 2014, claims a total of 36.5 million users, with 20 million monthly active users. The company’s total trading volume recorded $ 72.4 billion year-over-year in June, while its revenue has grown more than 102% in the past two years during the pandemic. Kakao Pay recorded $ 6.9 million (8.2 billion won) of EBITDA in the first half of 2021.
Kakao Pay said that one of its differentiators is creating synergies with its sister companies such as the Kakao messaging app, Kakao Bank, Kakao Mobility and Kakao Games.
Kakao Mobility and Kako Entertainment are also slated to go public in 2022.
Kakao Corp’s digital lender subsidiary Kakao Bank, which raised $ 2.3 billion via an IPO in August, had a market capitalization of $ 23.9 billion (28 trillion won) as of today. .