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Kakao Entertainment, the content subsidiary of South Korean IT giant Kakao, may receive up to 800 billion won ($592 million) in investment from Saudi Arabia, following the Kingdom's Crown Prince's visit to Seoul last week. The Public Investment Fund, is reportedly in discussion with its Singaporean counterpart, GIC Private Limited, about investing in the entertainment firm, according to news reports on Wednesday.
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The Korean contents operator seeking a valuation of around 10 to 12 trillion won ($8.4 billion) is hoping to draw 1 trillion won in pre-IPO funds before going public next year. Kakao Entertainment plans to use the proceeds to build up its portfolio through M&As before the public offering. The pre-IPO funding scheme could be delayed to December or early next year due to volatile financial market conditions. Kakao Entertainment has been trying to bolster content in web fiction, comics, visual content production, and music sources through M&As.
24 Nov 2022
PIF Rides the Hallyu Wave
PIF to fund $800B for Kakao Entertainment’s initial public offering due next year.
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Why it matters
Saudis Crown Prince has been keen on investing in industries such as tech and video games in a bid to diversify the PIFs portfolio. The PIF is known to have allocated $10 billion in funds to buy stocks of entertainment and renewable energy firms. The fund has secured a 9.26% stake in NCSoft this year to become the second-largest shareholder. It is also the fourth-largest shareholder of Nexon listed in Tokyo after its 7.09% stake purchase. It has built up a considerable portfolio of investments in the gaming industry, including a 5% stake in Japan's iconic Nintendo in addition to stakes in Capcom, Activision Blizzard, Electronic Arts, and Take-Two.