SINGAPORE (Reuters) – South Korean messaging app service provider Kakao Corp is aiming to acquire global content providers in Japan and the United States after successfully raising $1 billion from foreign investors, a senior company executive said.
“Games are a very important sector of Kakao. So we are thinking of M&A for these sectors – content and platforms. Japan and the United States are our primary targets,” Bae Jae-hyun, an executive vice president at Kakao, told Reuters on Friday.
He was speaking after the company behind South Korea’s dominant messaging app Kakao Talk, which has about 49 million users, listed its global depository receipts on the Singapore Exchange.
“If you see our portfolio, we have many verticals in Kakao group. Some of them are music, web literature and video on demand,” Bae said.
Kakao could spend more than 70% of the money raised from GDRs on M&A and acquire companies this year and in early 2019, he said.
The company, which counts an affiliate of China’s Tencent Holdings among its investors, is seeking to diversify and reduce its reliance on its messaging app, which has come under pressure from rivals such as Naver Corp.
“Messaging itself is not a cash cow … Under the messaging platform, we are creating many businesses,” Bae said.
Kakao has expanded its business beyond its app to co-developing artificial intelligence technology with companies such as Hyundai Motor, taxi and ride hailing, e-books and other services.
“We expanded to Indonesia and we are aiming to go into the Japan market, which is huge in Asia. And we are also thinking of China and East Asia and the United States,” Bae said.
(By Anshuman Daga; Additional reporting by Ju-min Park in Seoul; Editing by Stephen Coates)