Kakao Corp. is currently in the middle of acquiring Radish Fiction, a US-based mobile app that offers diverse serialized fiction. Established in 2016, Radish Fiction is a web novel platform co-founded by its Oxford University graduate CEO, Lee Seung-Yoon. The major South Korean Internet company would obtain Radish Fiction’s management rights with an estimated $354 million backing.
Moreover, Kakao Entertainment, Kakao’s multimedia and publishing subsidiary, has been discussing terms with Radish. In 2020, the Kakao entertainment unit invested $28.5 million to Radish, raising its share to 12%. This year, Kakao made additional investments in Radish and acquired shares through capital firms, increasing its ownership. The Radish deal would be Kakao’s largest investment since it acquired LOEN Entertainment, one of South Korea’s leading music streaming service platforms, for $1.6 billion in 2016.
Future Growth Through Content Acquisitions
Based on App Annie’s data, Radish is the fourth-largest mobile fiction platform in the US, accumulating over 4 million downloads. The Korea Creative Content Agency stated that it expects the worldwide content market to rise to $2.4 billion by 2024. Additionally, Kakao plans to promote Radish’s original content beyond US users and diffuse them to international markets. By strengthening its US foothold with the Radish acquisition, Kakao aims to expand its webtoon services to more locations.
In addition to distributing material to wider audiences, Kakao would actively use its data-driven capabilities to source diverse story content. According to Kakao, it aims to secure story content and significantly increase its intellectual properties (IP) and create more synergies. Kakao also plans to adapt original stories from Radish into TV series, movies, games, web novels, digital comics, and more. Besides expanding its IP content library, Kakao invested in Radish to promote the global mobile fiction market growth.
As an IT industry source stated, “Intellectual property is one of Kakao’s pillars of future business growth, alongside messaging and financial services.” Accordingly, Kakao’s Radish investment would secure its lead in the heightening global and domestic IP competition.
IP Content Competition
Furthermore, during the Radish investment negotiations, Kakao competed with an unnamed venture capital firm that offered a higher bid. However, Kakao managed to procure Radish with the future benefits, and IP progresses their partnership could create. Due to the Radish acquisition, industry experts expect Kakao to take on Naver in various business sectors, including entertainment and fintech. This year, Naver acquired the multi-platform e-story publishing app Wattpad to reinforce its position as a leading global entertainment provider.
