Kakao-Daum Reverse Merger on KOSDAQ with Market Cap of $9.5 Bln.

In what appears to be a repeat of the Facebook WhatsApp transaction here in the U.S., Korean mobile messaging and ecommerce app Kakao went public on Oct. 1 with a reverse merger with the existing public Daum on the KOSDAQ (Korean Stock Exchange). The combined entity now boasts a market cap of $9.5 billion. Kakao is one of several recent tech success stories in the Asian market. The company was the first Asian mobile messaging app to combine human-to-human interaction with the purchase of virtual goods, giving the company a business model that combines social messaging and typical gaming applications. Per the Forbes article:

Kakao is moving into the next wave of innovation in mobile, a combination of social messaging, gaming, payment and commerce all in one service.  The Korean startup, launched in 2010, will leverage Daum’s strengths as South Korea’s second-largest Internet portal with news, shopping, forums, messaging and email.

Venture firm DCM provided the initial $5MM infusion in 2011 while Tencent brought in a second round of some $63MM in 2012. According to Forbes the initial investors have made more than 30x their initial investment. Kakao boasts more than 90% penetration in Korea and more than 140 million total users worldwide. Tencent has been heavily invested in mobile, gaming and messaging technology.

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Nate Nead
Nate Nead is a licensed investment banker and Principal at Deal Capital Partners, LLC which includes InvestmentBank.com and Crowdfund.co. Nate works works with middle-market corporate clients looking to acquire, sell, divest or raise growth capital from qualified buyers and institutional investors. He is the chief evangelist of the company's growing digital investment banking platform. Reliance Worldwide Investments, LLC a member of FINRA and SIPC and registered with the SEC and MSRB. Nate resides in Seattle, Washington.
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