An investment firm backed by Japan's LY Corp. will invest 300 billion won to become Kakao Games' largest shareholder. The deal is set to close in May, pushing Kakao to second place. Kakao Games aims to use the funds to boost global competitiveness.
Kakao Games announced in regulatory filings on Wednesday that LAAA Investment, backed by Japan's LY Corp., will acquire an undisclosed stake and purchase 240 billion won in new shares and 60 billion won in convertible bonds. The 300 billion won ($200.4 million) investment will make LAAA the largest shareholder upon closing in May, with current largest shareholder Kakao—holding 40.7 percent per The Korea Times or 37.6 percent per Yonhap—becoming second-largest. A Kakao Games official stated, “The latest investment decision is an important turning point for Kakao Games to improve its global competitiveness and strengthen the foundation for sustainable growth,” adding, “Based on cooperation between partners including Kakao and LY Corp., we will expand our opportunities in the global market.” LY Corp. operates Yahoo! Japan and the Line messaging app, popular in Japan and Southeast Asia. Kakao Games has reported operating losses for the past five quarters amid declining live service game sales, rising development costs, and restructuring of non-core businesses. Last year, it sold stakes in Sena Technologies and Kakao VX to focus on gaming. The company launched SMiniz, a K-pop puzzle game, in February and plans Odin: Q and ArcheAge Chronicles later this year. Kakao plans to reinvest part of the proceeds from the share sale to maintain its partnership and support stable operations.
