Kakao Pay IPO: App More Than Doubles on Trading Debut
Coinspeaker
Kakao Pay IPO: App More Than Doubles on Trading Debut
Kakao Pay Corp, South Korea’s largest financial services app, more than doubled in its trading debut in Seoul on Wednesday. The company’s initial public offering price rose by 156% due to investor enthusiasm for the fintech firm’s growth potential. The share price started out at 90,000 won (with 17 million new shares on offer), before closing at 193,000 won on Wednesday. Furthermore, the digital finance startup, which is backed by Jack Ma’s Ant Group Co., raised 1.53 trillion won ($1.3 billion). This subsequently bestows a market capitalization of over 11.7 trillion won on Kakao Pay prior to trading.
After the market opened, shares of Kakao Pay hit 230,000 won on the Kospi index – bringing the fintech company’s market capitalization to 25.2 trillion won. As a result, Kakao Pay is now the 14th largest company on the benchmark index. In addition, its opening day performance is the strongest by a company in the main Koran Index since Iljin Hysolus Co Ltd. The latter’s shares gained 160% in September.
Kakao Pay CEO Ryu Young-joon was understandably pleased with the company’s spirited performance on the Korean Exchange. At the company’s listing ceremony, he had this to say:
“Kakao Pay is now at a turning point to go forward and be a leader as a financial platform for people. I promise to demonstrate transparent management, financial innovation, growth with financial institutions and partners as well as sustainable expansion at home and abroad.”
Kakao Pay plans to spend part of the proceeds on launching new services, including mobile stock trading and nonlife insurance. In addition, the fintech is looking to expand its presence into several markets abroad.
Kakao Pay Endured Several Regulatory Hurdles En route to Trading Debut
The path to such a recent achievement, however, was not smooth for Kakao Pay. The mobile-only financial firm weathered a string of increasing regulatory scrutiny targeting internet-based, financial companies. In fact, Kakao Pay had to postpone its planned listing by more than two months at some point. It first lowered its targeted IPO size back in August upon orders from government authorities – who demanded a revised company prospectus. A month later, Kakao Pay had to fine-tune its filing again to abide by new regulations.
South Korean financial regulators are biting down on big tech companies in the country over how they handle customer data. These regulators also allege that many of these companies’ practices are also hurting small businesses. Analysts believe that the pressure from the government, lawmakers, and social groups is unlikely to abate anytime soon.
According to Kakao Pay, its accumulated number of users reached 36.5 million in June, while monthly active users hit 20 million. In addition, fintech has the highest number of financial partners in the country – at 127.
Kakao Pay’s listing comes amid the record number of IPO deals this year in South Korea. Several companies are looking to take advantage of high valuations via public listings, notable among which is game developer Krafton.