Webtoon Entertainment soars on Nasdaq debut, eyes global franchise success

Industry

Published: 28 Jun. 2024, 07:00 Updated: 28 Jun. 2024, 15:13

Webtoon Entertainment soars on Nasdaq debut, eyes global franchise success

Webtoon Entertainment executives and employees pose for a photo at the bell-ringing ceremony of the company's Nasdaq listing at New York's Times Square on Thursday. [WEBTOON ENTERTAINMENT]

Webtoon Entertainment's chief envisions that the company could birth the next major global franchise on par with the cultural impact of Harry Potter or Pokemon after its successful debut on the U.S. Nasdaq market on Thursday.

“There are 24 million creators who’ve generated 55 million pieces of content that could be consumed anywhere in the world,” CEO Kim Jun-koo said at an online press briefing on Thursday. “What earned the appeal of global investors is that the ‘next big thing,’ equivalent to the cultural effect of Harry Potter or Pikachu, may stem from Webtoon Entertainment.”

Kim points to the flourishing diversity of content as the primary driver behind the company’s future success.

“Webtoon Entertainment’s competitive edge lies in diversity,” Kim said. “There exist many forms of content players in the world. [While in TV series or films], it might take some 200 people two years to create one whole piece of content, but for us, our leverage is that we are a platform company that provides the gateway for each individual creator to generate their own content.”

The company will utilize the IPO proceeds to expand its platform and advertisement. Currently, platform operations account for 80 percent of the total revenue, followed by 10 percent from advertising and intellectual property (IP) operations, which include adaptations to other formats such as TV series and films.

Webtoon Entertainment founder and CEO Kim Jun-koo poses for a photo at the bell-ringing ceremony of the company's Nasdaq listing at New York's Times Square on Thursday. [WEBTOON ENTERTAINMENT]

The company’s IPO has attracted investment from global investment firms like BlackRock, which Kim described as an “investor who bought into our vision most quickly.”

Chief Strategy Officer (CSO) Kim Yong-soo hinted that other major Wall Street firms also “were key investors” in the listing process, although he refrained from disclosing specific names.

So far, the company has concentrated on attracting creators to enhance diversity, but will now turn its eyes to strengthening its business models to drive profitability.

“The key point is that our operating cash flow is already positive, and we have achieved profitability, which is different from many tech companies in the U.S. market that often need funding for operations,” CSO Kim said. “While our core business is on track and growing without the need for capital, we plan to utilize the investments strategically to enhance our platform and advertising capabilities, aiming to expedite our expansion into the North American market to achieve a similar status as in Korea and Japan.”

Employees of the digital comics platform Webtoon Entertainment celebrate in Times Square as the company holds an initial public offering (IPO) at the Nasdaq MarketSite in New York on Thursday. [REUTERS/YONHAP]

Webtoon Entertainment, a Los Angeles-based digital comics company owned by Korea’s leading portal site Naver, saw its share price close 9.5 percent higher than its initial offering price.

Trading under the ticker “WBTN,” Webtoon Entertainment closed at $23, making a 9.5 percent increase from its initial offering price of $21.

At that price, the company will raise $315 million through offering 15 million shares of common stock.

Webtoon Entertainment is currently valued at more than $2.9 billion based on Thursday’s closing share price.

After the listing, Naver retains a 63.4 percent stake in Webtoon Entertainment to remain the majority shareholder with the right to appoint board directors. Line Yahoo, the Tokyo-based operator behind Line and Yahoo Japan, will follow with a 24.7 percent stake in the company.

Webtoon Entertainment arrived at its current management form after recapitalization between Naver Webtoon, its Korean subsidiary, and Line Digital Frontier, the operator behind Japan’s digital comic service Line Manga, in 2020.

The following year, Naver acquired the Toronto-based self-publishing platform Wattpad for $600 million and placed it under Webtoon Entertainment.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]