Kakao Corp.’s Japanese affiliate, Kakao Japan, shared that it would secure 600 billion won ($532 million) in funding to boost its business operations. The subsidiary would acquire the investment from the South Korean private equity firm Anchor Equity Partners.
Kakao, the largest South Korean messaging service provider, currently has a 78.5% share in its Japanese unit. Meanwhile, Kakao Page Corp. holds the 21.5% share remainder. According to investment banking industry sources, Kakao Japan would finalize the deal with Anchor Equity Partners sometime this month. Under the agreement, the private equity firm would obtain around a 15% share in Kakao Japan.
After the proceeding, the Kakao subsidiary’s valuation would reach up to 8.8 trillion won ($7.8 billion). Kakao Japan’s latest funding acquisition is the first investment attraction among Kakao’s overseas subsidiaries in 2021. So far, it is also the largest external investment obtained by a content company in Japan this year.
Enhancing Webtoon Content Production
Following this investment, Kakao Japan remarkably positioned itself as a powerful global platform. Kakao Japan rapidly achieved this standing only after five years since establishing the webtoon subscription service Piccoma. As a result of the high K-webtoon demand in Japan, Piccoma succeeded in popularizing webtoons.
Piccoma popularized Korean-style digital comic content using its accumulated strategies and extensive know-how. In addition to promoting webtoons, the Kakao affiliate increased Japan’s digital manga market share.
Furthermore, Kakao Japan would utilize the newly acquired proceeds to improve its webtoon content production in Japan. In particular, the company would support local content creators and establish platforms that would cultivate their talents and ideas.
The funding would also function as a strategic preparation ahead of Kakao Japan’s planned initial public offering (IPO) in 2022. Industry watchers expect Kakao Japan to earn a higher valuation after using the earnings to collaborate with more companies and strengthen its existing businesses, especially Piccoma.
Accelerating the Global Webtoon Trend
Since launching in 2016, Piccoma became one of the leading webtoon platforms in the Japanese market, maintaining a sharp growth. Piccoma also continues to release hit webtoons, including Itaewon Class and Solo Leveling. These webtoon releases draw more than 310 million won in sales per month. Although Korean webtoons only take up a small percentage of Piccoma’s IP portfolio, they generate over 50% of its revenue.
“We plan to expand Kakao’s global influence by actively securing globally competitive IPs, leading the market, and aggressively investing in new business areas,” said Bae Jae-Hyun, the CIO leading Kakao Japan’s investment attraction.
As part of its webtoon production enhancements, Kakao Japan recently launched Studio1Pic, a production studio for South Korean webtoon creators. Additionally, Kakao Japan and South Korea’s Daewon Media previously established Sherpa Studio, another webtoon content development platform.
The Kakao subsidiary Kakao Entertainment also finalized its acquisition of two US-based storytelling platforms, Radish Fiction and Tapas Media. This move reinforces Kakao’s leadership in the fast-growing global webtoon competition.
