Kakao Entertainment Raised More Before IPO

Kakao Entertainment is facing an imminent investment worth 1 trillion won ($785 million) from major global investors in its pre-IPO round.

According to the investment banking industry Monday, the entertainment company is soon expected to sign a stock purchase agreement (SPA) with Singapore’s sovereign wealth fund GIC and Saudi Arabia’s Public Investment Fund (PIF) this month. The PIF is led by Saudi Crown Prince Mohammed bin Salman, and has shown interest in Korean content and game businesses, as it acquired stakes in Nexon and NCSOFT last year.

The entertainment company’s corporate value for this round of investment is valuated at around 10 trillion won. With the new capital, the company plans to accelerate its further growth.

The company had pursued aggressive M&As in a wide range of areas during the past few years, enlarging its size. Its businesses range from K-pop management, intellectual property with webtoon and webnovel platforms and music streaming service. The firm acquired U.S.-based Tapas Media and Radish Media in 2021. The same year, it also acquired Melon Company, which operates Korea’s representative music streaming service. K-pop artists managed by the firm include IU, IVE, Monsta X and The Boyz.

Kakao Entertainment previously aimed to go public during the second half of last year, but it had to delay the IPO plan amid market uncertainties. Instead, it decided to advance into further rounds of investment to facilitate stable growth.

Kakao holds a 73.6 percent stake in Kakao Entertainment, while Anchor Equity Partners is the second-largest shareholder of the firm. GIC invested in the entertainment firm in 2016 as a limited partner of Anchor Equity Partners.

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Victor Koch

Serial entrepreneur, accredited investor, and hedge fund manager. Ex-General Partner of Koch Fund