A promotional photo of Kakao Pay (Kakao Pay)
South Korean mobile payment app operator Kakao Pay said Friday it has delayed its plan to go public yet again amid toughened consumer protection regulations in the domestic market.
Kakao Pay, a 55:45 joint venture of internet giant Kakao Corp. and China’s Ant Group, has revised its prospectus to carry out its initial public offering process by three weeks. Its IPO size, at up to 1.53 trillion won ($1.3 billion) via 17 million new shares, will remain unchanged.
According to the latest filing, Kakao Pay’s book building for institutional investors will take place on Oct. 20-21, while its IPO targeting retail investors is scheduled on Oct. 25-26, which will be followed by its listing on the Korea Exchange on Nov. 3.
Kakao Pay said that a revision of the IPO prospectus centers on “changes in descriptions about customer services in the wake of the introduction of the Act on the Protection of Financial Consumers.”
In the new prospectus, Kakao Pay said that its app allowed its better access to information about distributors of financial products and services. The company added that it had shelved part of its financial services than before, including distribution of insurance products, in order to abide by the new rules, effective Friday.
Kakao Pay, however, stressed that the suspended services accounted for no more than 2 percent of its revenue since 2018, claiming that the suspension will have a limited impact on the company’s growth potential.
This comes shortly after Alex Ryu, chief executive officer of Kakao Pay, declared earlier on Friday that its operation would be “customer-centric.”
Kakao Pay Chief Executive Officer Alex Ryu (fifth from left) and staff pose for a photo during a ceremony held at its headquarters Friday. (Kakao Pay)
This marks the second delay in Kakao Pay’s bid to go public.
In an earlier revision in August, Kakao Pay pledged to exclude businesses associated with brokeraging peer-to-peer lending services and cryptocurrency trades. Kakao Pay also replaced its peer companies for its company valuation.
But with the financial authorities’ apparent bid to curb the rapid expansion of “financial platform” business operators, Kakao Pay was forced this month to scale down its financial services -- designed to allow financial institutions to distribute insurance products, loans and funds to Kakao Pay users.
As a result, Kakao Pay over the past few weeks has halted its personal recommendation services of insurance products for car purchases, drivers, pet owners, sports enthusiasts and overseas travelers -- which allowed its users to make product comparisons.
By Son Ji-hyoung (email@example.com