S Korean online lender Kakao Bank prices IPO at top of range, eyes $2.2b

Photo: Kakao Pay website

South Korean digital bank Kakao Bank Corp will raise $2.2 billion in its initial public offering (IPO), the company said in a filing on Thursday.

The shares were priced at 39,000 won each, the top of the range announced in a regulatory filing this month, to raise about 2.6 trillion won ($2.22 billion).

The listing, expected in August, will be the country’s biggest since game company Netmarble raised 2.7 trillion won in its 2017 IPO, overtaking this year’s 2.2-trillion-won listing of battery material maker SK IE Technology Co Ltd.

The 65.5 million shares on offer are all newly issued.

Demand was heavy. A total of 1,667 domestic and foreign institutional investors placed bids totalling 2,585 trillion won, the largest amount of institutional bids ever for a South Korean IPO.

The pricing values Kakao Bank at 18.5 trillion won, which nears valuations of the largest South Korean banking groups’ holding companies such as KB Financial Group and Shinhan Financial Group, worth 21.5 trillion won and 19.9 trillion won on Thursday.

Kakao Bank, one of two digital banks, ranks No. 1 among South Korea’s financial apps with 13.35 million monthly active users (MAUs), while holding 14th place among all the nation’s apps, the company said.

Having become profitable in 2019 after less than two years in operation, it reported net profit of 113.6 billion won in 2020, an eight-fold increase from 13.7 billion the previous year, it said.

Last year, interest income accounted for 75% of its operating income, while 19% came from non-interest income, and 6% from “platform profits” such as connecting users to other financial firms’ services and advertisements.

The bank plans to use the funds to grow in these areas, including offering mortgages, which are South Korea’s most common type of loan, by mobile telephone early next year at the latest, Chief Executive Daniel Yun told reporters.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.