Korean fintech Kakao Pay to acquire majority stake in US brokerage firm Siebert

Kakao Pay, the online payment service of South Korean messaging and Internet giant Kakao, announced that it has acquired a stake in Siebert Financial, a New York-based brokerage firm. Kakao spent $17 million on this transaction and the company now owns a 19.9% ​​stake in Siebert.

This is just the first step, as Kakao Pay plans to acquire an additional 31.1% stake in Siebert, pending shareholder and regulatory approval. If carried out, Kakao Pay would become Siebert’s largest shareholder, with a total stake of 51%. Gloria Gebbia, majority shareholder and Siebert board member, told TechCrunch that the second transaction is expected to close in the first quarter of 2024.

Kakao Pay first launched its mobile payment service in 2014. It was spun off from Kakao Corp in 2017 and is now one of the leading mobile payment players in South Korea. The Korean fintech firm offers online and offline payments, money transfers, credit scoring, insurance, and loan services to approximately 40 million registered users in South Korea. Siebert Financial, the US-based financial advisory and brokerage firm, and its subsidiaries have provided financial services for more than 50 years. One of its subsidiaries, Muriel Siebert & Co (MSCO), has more than 100,000 clients.

Today’s acquisition represents Kakao Pay’s first M&A transaction outside of its home market. It’s part of a larger strategy as the company plans to expand into the US market and strengthen its brokerage unit Kakao Securities at the same time.

Kakao Pay “plans to create a new offshore stock trading solution that combines Kakao Securities’ user-focused MTS (money transfer services) with Siebert’s brokerage infrastructure, which could be expanded to foreign fintech companies, including those of Southeast Asia,” Gebbia said. TechCrunch.

Kakao Pay will integrate its technology expertise into Siebert financial services as part of the strategic partnership to deliver “an advanced user experience through extended access to the US stock market, lower stock trading fees, and more.” Gebia said.

“Kakao Pay has gained a great opportunity to expand its financial business abroad by making a strategic investment in Siebert, a company with more than 55 years of tradition and experience,” Kakao Pay CEO Won-Keun Shin said in a statement. release.

Kakao Pay currently offers payment services in South Korea, Japan, Macao, Singapore, France, and China.

Siebert’s current management team, headed by the Gebbia family, will remain at the helm of the company. The 120-employee team will remain after the transaction closes, the two firms told TechCrunch. “We do not expect this transaction to impact day-to-day operations and we will continue to operate the business in a manner that drives long-term success for our customers and employees,” Gebbia said.

Kakao Pay has a team of 1,130 people, according to a Kakao Pay spokesperson.

“Partnering with Kakao Pay will provide us with significant financial resources to opportunistically invest in our key business lines while leveraging Kakao Pay’s expertise and technology capabilities to expand our reach and enhance our technology offerings,” Gebbia said in a statement. .

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