Kakao Pay heads to Kospi

Kakao Pay, the financial technology arm of mobile giant Kakao, is finally heading to the country’s main stock board, defying market expectations that it was considering the tech-heavy secondary market or even overseas listings.

The company filed for a preliminary review for its listing to KRX , the stock market exchange, on Monday, a regulatory filing showed. According the the disclosure, the IPO is expected to be priced between 73,700 won ($66.32)and 96,300 won per share to raise 1.9 trillion won.  

The prcing at the top range puts the company's enterprise value at 10.7 trillion won. 

“Given the size of the company valuation, Kakao Pay decided to be listed on Kospi and it is expected to file the application as early as Monday,” one of the sources said.

Considering the screening process that generally takes 45 days, Kakao Pay could make a market debut as early as July, even before the IPO of Kakao Bank, which filed a preliminary application on April 15. 

Kakao Bank carried out a capital increase of 1 trillion won in the last quarter of 2020, with participation of TPG Capital of the US and Anchor Equity Partners of Hong Kong. Kakao Bank, which will become the first Internet-only lender to go public in the country, might take a breath before going public partly to boost its valuation, market watchers said.

While deciding to float on the country’s main board, Kakao Pay also had considered overseas listings as an option, according to an industry insider, who asked to remain anonymous citing confidentiality of the matter.

Mirroring other emerging companies such as Coupang and Kakao Entertainment, Kakao Pay executives looked into overseas markets for high valuation possibilities and brand reputation building.

Another member of the Kakao family, media content producer Kakao M announced its intention to go straight to the US stock exchange. Earlier in April, the Kakao M CEO told Bloomberg the company was aiming for a listing a year from now, a shift from its original plan to go public within this year.

“Even if the company wants to go abroad, it might be difficult as a fintech company that has to work closely with financial regulators,” the source said.

E-commerce platform Coupang made a successful market debut on New York Stock Exchange in March, and other unicorn startups such as leading fintech app Toss operator Viva Republica are following in Coupang’s footsteps, which is a blow to the country‘s stock exchange operator. 

By Park Ga-young (gypark@heraldcorp.com">gypark@heraldcorp.com)