Korea’s dominant messaging firm Kakao is back raising funds after its games business, a standalone unit that is headed for an IPO, pulled in $130 million (140 billion KRW) from Tencent and a range of other strategic investors.
The company, which owns Korea’s top mobile messaging app and one of the country’s largest internet portals, operates a sprawl of business that include taxi-hailing, deliveries, comics, payments and more. It has adopted the spin-out approach favored by Chinese tech firms for a number of these entities, with Kakao Taxi — for example — raising more than $400 million from outside investors last year.
Recently, Kakao itself completed a placement in Singapore which netted the parent firm $1 billion for international growth, and now it is the turn of its games business.
Kakao Games pulled the capital in from Tencent — the $500 billion Chinese tech giant that was an early backer of Kakao itself — via two subsidiaries and Korea’s Netmarble Games, which is backed by Tencent. Other that participated in the round include game development studio Actozsoft, Bluehole Studio — the producer behind PlayerUnknown’s hit game ‘Battlegrounds’ and an existing Kakao Games partner — and M&A fund Premier Growth.
The focus appears to be international growth, as the company had explained in a media interview last month. To date, Kakao Games has helped Korean developers take their games overseas, but it is looking at other opportunities including M&A, according to comments from the head of its business in Asia.
Representatives from Kakao did not reply to a request for further comment.
Kakao span out the games business last year and, speaking at the time, it said it planned to list the unit this year. There are also plans for its Japan-based anime business, among others, to go public. The central Kakao business will then operate as a holding firm that presides over a range of other independent units.