Korea based fintech arm of messaging giant Kakao, Kakao Pay has received $200m in private equity investment from Alibaba affiliate Ant Financial. The deal will allow Ant Financial to offer its financial services through Kakao Pay in Korea.
Kakao Talk has 48 million users. It is installed on over 95 percent of smartphones in Korea and it has long offered mobile payments through its platform. Last month, the company’s board made the decision to split its financial services into a new company which, beyond housing Kakao Pay (which allows over-counter payments, peer-to-peer transactions, bill payment, web banking and more) will move to offer financial services such as loans and financing. These are all areas where Ant Financial is already well entrenched and experienced in China, so the alliance makes plenty of strategic sense for both parties. Beyond helping Kakao accelerate, parent company Alibaba also has plenty to gain. This alliance could open the door for Alibaba to push its e-commerce services more aggressively in Korea, and also make it easier for visitors from China to use Alipay.