Here are some facts about Kim Beom-su and Kakao, the conglomerate that dominates South Korea's tech scene
SEOUL, South Korea – South Korean authorities arrested Kim Beom-su, the billionaire founder of tech giant Kakao Corp, on Tuesday, July 23, on accusations of stock manipulation during the acquisition of a K-Pop agency last year.
Here are some facts about Kim and the conglomerate that dominates South Korea’s tech scene.
Also known as Brian Kim, Kim Beom-su is regarded by the industry as a rags-to-riches visionary. He grew up in poverty, sharing a single room with seven members of his family at one point, and now has a net worth of about $3.4 billion, according to Forbes. He is 58 years old.
Kim is currently detained in a solitary cell, 1.4 square meters (15 square feet) big, at Seoul Nambu Detention Centre, South Korean media reported.
Kim founded South Korea’s first online game portal Hangame in 1998. He and his partners launched the KakaoTalk app in 2010, and the free messaging service took mobile users by storm a year later when smartphones began to proliferate in South Korea.
KakaoTalk gradually introduced services such as emojis, helping it attract thousands of users. It is now South Korea’s dominant chat platform, with 48 million monthly active users as of the first quarter of 2024, boasting a 93% penetration rate in South Korea’s 52 million population.
In 2014, Kakao merged with internet search portal operator, Daum, in a deal that valued Kakao at about $3.1 billion and resulted in a backdoor listing.
Leveraging KakaoTalk’s massive user base since, the company has expanded into services including advertising, games, music streaming, entertainment, shopping, payments, online banking, and transport.
Kakao has seen its number of affiliates grow from 26 companies in 2014 to 124 companies in 2024.
Kakao’s group of affiliates are worth 86 trillion won ($62 billion) by assets according to South Korea’s Fair Trade Commission.
The conglomerate has added to its war chest and paid off investors via IPOs, listing Kakao Games in 2020, and KakaoBank and KakaoPay in 2021.
Kakao’s mobility unit holds a more than 90% market share in South Korea’s taxi-hailing market. In November 2023, South Korean President Yoon Suk Yeol said the service was monopolistic and called for a review.
A data center fire in October 2022 knocked out some KakaoTalk and related services for up to several days and sparked public concern over how much government agencies and private companies rely on the app.
In March 2023, Kakao Corp and affiliate Kakao Entertainment won a takeover battle against K-Pop supergroup BTS manager Hybe to acquire K-Pop agency SM Entertainment, two months after Kakao Entertainment received a 1.2 trillion won investment from Saudi Arabia’s Public Investment Fund and Singapore’s GIC.
Kim’s arrest stems from a probe into whether Kakao and its executives committed any illegalities during the takeover process.
In late 2023, South Korean prosecutors charged an executive for allegedly manipulating SM’s stock price to hinder Hybe from acquiring it, by mobilizing about 240 billion won ($173.24 million) to buy up the stock.
Prosecutors are currently investigating Kakao affiliates in at least four other matters, local media have said. – Rappler.com
