KakaoBank Corp Shares Priced For $2.2B IPO

KakaoBank Corp., the five-year-old South Korean mobile-only bank, is prepared to raise $2.2 billion after pricing its initial public offering (IPO) at the top of a marketed range, Bloomberg reported Thursday (July 22). Established by Korea Investment Holdings and Kakao Corp., the bank, which is without any physical branch locations, priced 65.45 million new shares at 39,000 won each, netting a value of $18.5 trillion won.

As reported earlier this month, KakaoBank had been contemplating listing its IPO next year. COVID-19 has propelled marked growth in online financial services, which has helped to accelerate the timeline for the company’s IPO. KakaoPay, the company’s mobile payment and digital wallet service, was moving toward a planned $1.4 billion initial public offering later this summer. Spurred by the significant increase in contactless payments amid the pandemic, the company had originally planned the IPO for 2022 or 2023 but opted to adjust its timeframe because of the dramatic growth.

According to Bloomberg, institutional investors subscribed KakaoBank Corp’s IPO more than 1,700 times. The company’s shares will begin trading on the Korean stock exchange on Aug. 6 following retail investors’ subscriptions.

KakaoBank is a component of various Kakao affiliates, which have capitalized on Korea’s stock market explosion to go public. The company was formed in January 2016 when the Korean government provided online banking permits to startup businesses. The company has reaped the benefits of being under the umbrella of parent company KakaoTalk, the nation’s biggest mobile messenger service with 46 million active users, including most of South Korea’s 51 million people.

According to Statista, KakaoBank in 2020 had a net income of 114 billion South Korean won, which amounts to an eight-fold increase in year-over-year revenue. The company gained more than 10 million customers within its first two years of operations.