KakaoTalk operator trapped by fund shortfall as venture business

KakaoTalk operator trapped by fund shortfall as venture business

Won Yo-hwan

2013.11.13 15:21:12

Kakao, operator of South Korea’s largest mobile messenger KakaoTalk, is facing hard times. KakaoTalk grew exponentially until last year, spurring the mantra “whatever KakaoTalk does becomes success.” But the mobile phone messenger application is not as influential as it used to be. Its competitors Line and WeChat, meanwhile, are gaining edges in the global market. Eyes are on how Kakao, the big player in the mobile start-up industry, will break through the situation. What has been undermining the KakaoTalk’s platform? First, KakaoTalk has lost momentum in the game business. The mobile messenger app offered its own platform-based games Anipang and DragonFlight, which were downloaded 20 million times shortly after release last year. But none of the KakaoTalk-based games launched this year have been downloaded 20 million times so far.
Another tragedy for KakaoTalk is that rivals like Line and WeChat have secured dominant presence in the overseas market, just like KakaoTalk gained a leading share in the domestic market earlier. The messenger app needs to enter foreign markets as the domestic market has become saturated, but the overseas mobile messenger market is already controlled by Line and WeChat.
Kakao’s another urgent task is to diversify its business portfolio, which now heavily relies on KakaoTalks’ games.
More fundamental reason behind the poor performance is that Kakao lacks funding like other venture firms. If the company does not gain a strong foothold in the market in the early phase, instead it needs to aggressively undertake marketing activities. But the fund shortage puts Kakao behind its rivals in the competition.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

2 Responses to KakaoTalk operator trapped by fund shortfall as venture business

  1. Pingback: The next Asian messaging app exit may be worth more than $19b | EN.SamacharYug.com

  2. Pingback: The next Asian messaging app exit may be worth more than $19b / Bubbly Blog

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