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South Korea's Kakao to buy two U.S. storytelling apps for $950 million

By Reuters

By Joyce Lee

SEOUL (Reuters) – South Korea’s Kakao Entertainment Corp said on Tuesday it was acquiring U.S.-based online comic app Tapas and serialized fiction app Radish for $510 million and $440 million, respectively.

The purchase will make Kakao, the online comic, talent agency and movie-making unit of South Korean tech giant Kakao Corp, the latest South Korean entertainment firm to expand in North America as Korean entertainment’s global reach widens.

“We are planning to engage the North American market in earnest through the intellectual property (IP) business” through the acquisitions, Kakao Entertainment Chief Executive Officer Jinsoo Lee told Reuters.

“Just 80 Kakao IPs are responsible for half of Tapas’ sales… Based on such growth data, we determined that Kakao Entertainment’s growth formula in Korea or Japan was also possible in America and other English-speaking regions.”

Kakao Entertainment has seen success with its online-based web cartoons or “webtoons” at home and in Japan, with Kakao-backed ‘Piccoma’ becoming one of Japan’s highest-grossing mobile apps outside games.

Kakao also owns serialized fiction IPs, movie production companies, actors’ talent agencies, K-pop artists’ labels plus performance and content companies, making it “unique” in its ability to convert a single IP into many channels and forms, Radish CEO and founder Seungyoon Lee told Reuters.

“It can literally take a web fiction into a webtoon then turn it into a TV drama and movie.”

Radish adds to this smartphone-optimised “bite-sized” fiction from teams of writers, including some who have won Emmy Awards for soap operas, with revenue that jumped tenfold in 2020. Tapas’ strength in “webtoons” led to five-fold jump in sales in 2020, Kakao said.

Radish previously received Series A funding from investors including SoftBank Group Corp’s venture arm and Kakao.

Earlier this year, K-pop sensation BTS’ agency HYBE announced the acquisition of Scooter Braun’s Ithaca Holdings in a $1.05 billion deal.

South Korea’s tech giant Naver purchased Canada-based storytelling platform Wattpad for $600 million.

(Reporting by Joyce Lee; Editing by Tom Hogue and Rashmi Aich)