Saudi and Singapore wealth funds join $930 million pre-IPO bet on anime giant
Kakao Entertainment will use the capital to expand its content
Dubai: Kakao Entertainment Corp. has won $930 million from the sovereign wealth funds of Saudi Arabia and Singapore, securing one of the country’s largest financing rounds.
The company, a unit of Korean social media giant Kakao Corp., said it’s raising 1.2 trillion won by issuing about 2.26 million shares at 255,116 won apiece to Saudi Arabia’s Public Investment Fund and Singapore’s Pwarp Investment, an investment vehicle of GIC Pte.
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Kakao Entertainment, which runs a stable of apps that publish popular online animated shows and novels, will use the capital to expand its content. The company produces a slate of shows for Netflix, capitalizing on booming interest for Korean content from K-pop to movies since the advent of “Squid Game.”
Kakao shares, which are down 37 per cent from a year ago, fell 0.7 per cent on Thursday.
Diversifying investments
Saudi Arabia, which wants to lower its reliance on oil exports, has been beefing up investment in games and entertainment providers, such as Korea’s NCSoft Corp. as well as Tokyo-listed Nexon Co. PIF’s also lifted its stake in Japan’s Nintendo Co. to 6.1 per cent from 5 per cent, according to a filing. Singapore’s GIC has reportedly owned stakes in a broad portfolio of games-related firms.
Kakao Entertainment had been considering a New York IPO since at least 2021, though the timeline now looks uncertain given cratering tech valuations worldwide.
The Pangyo-based entertainment company, whose online web cartoons or “webtoons” are popular at home and in Japan, has been expanding its businesses overseas through startup acquisitions including of Tapas Media and SoftBank Group Corp.-backed Radish.
“It’s significant that we were able to secure funds of this scale at a time when both the Korean and global markets face a lot of uncertainty and investment sentiment is weaker,” Kakao Corp. Chief Investment Officer Bae Jae-hyun said in a statement.