Kakao Pay plans to have investment services soonKakao Pay, the payment subsidiary of Kakao, announced Monday that it has acquired a local brokerage firm Baro Investment & Securities in an attempt to expand its financial services.
Baro Investment & Securities, founded in 2008, reported 57.3 billion won ($51.5 million) in revenue with 7.3 billion won in operating profit last year.
Kakao Pay said it will be able to provide a wider variety of financial services to its users through the acquisition, including investing in funds and exchanging stocks through the mobile messenger app.
The accessibility of these services through the app will make it easier for those who normally find it difficult to participate in such investment activities, such as students, to enter the market.
“This is Kakao Pay’s first step towards full-fledged financial businesses,” said Ryu Young-joon, chief executive of Kakao Pay. “We will be further strengthening our affiliate businesses and partners to expand our services so that our customers could enjoy a differentiated financial experience.”
Baro Investment & Securities CEO Suh Gyung-min said he expects the firm will be increasing the wealth of its clients by providing customized investment services using Kakao’s technologies, including big data and artificial intelligence.
Although Kakao Pay did not disclose details of the deal, industry sources speculate Kakao Pay acquired the 60 percent stake of the brokerage firm for 40 billion won.
Shinhan Capital owned a 100 percent stake in the brokerage firm since it purchased the shares in 2011 and specialized in institutional investments. In 2011, the brokerage firm had an operating profit of 2.7 billion won.
Kakao Pay was launched in 2014 by the nation’s largest mobile messenger app developer, Kakao.
BY LEE HO-JEONG [email@example.com]