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.