June 29, 2022

South Korean fintech firm Kakao Pay, a subsidiary of mobile giant Kakao Corp. reported to have recorded a net loss in the third quarter due to increased expenses and investments.

According to the data submitted by the company, in the July-September period its revenue rose 73 percent on-year to 331.2 billion won ($280 million) on the growth of transaction volume and financial business. Its operating loss came to 1.01 billion won, with net loss of 1.8 billion won.

The fintech firm mentioned that its marketing expenses increased 220 percent in the reporting quarter as it tried to strengthen merchant promotions and invested in the establishment of subsidiaries.

Its merchant network grew 14 percent on-year to 1.3 million in the same quarter and will continue to 2 million merchants out of the 2.5 million in the home country.

The company also reported to have paid a one-time expense to establish its brokerage subsidiary, which is expected to officially launch either later this year or early next year.

Its accumulated payment transaction volume so far this year stood at 72 trillion won in the quoted period, exceeding last year’s total transaction volume of 67 trillion won. While it now expects its total transaction volume for 2021 to surpass 100 trillion won.

According to the company, it has so far accumulated some 36.5 million users, with the number of monthly active users reaching 20 million. In the same quarter, each active customer used the platform for 87.5 transactions on average.

It made its stock market debut on Nov. 3, with shares closing up 114% in its market debut.

Kakao Pay backed by Ant Financial ended day one of trading at $163.30 (193,000 won), securing a market capitalization of $21.2 billion during its IPO debut.

The company’s shares on the KOSPI surged as high as $194.60 (230,000 won), up 155.6% from the issue price of $76.20 (90,000 won), the upper end of its IPO range.

It had also raised $1.3 billion (1.53 trillion won) at a $9.9 billion valuation, offering 17 million new shares in its initial public offering last week.