Kakao, a South Korean company with a popular mobile text-messaging and gaming application, will essentially go public as it forms a merger with publicly traded Korean web portal-company Daum Communications. The two companies announced the deal today.
The deal is a reverse takeover, Bloomberg reported today. Altogether, it comes out to 3.1 trillion won ($3.03 billion), according to the Wall Street Journal. Kakao will get three-quarters of a new company called Daum Kakao.
Kakao was going public anyway, roughly next year. Now it could trade on public markets as early as October, according to Bloomberg. For now, Daum trades on South Korea’s Kosdaq; its stock was up 6.69 percent on the news.
New games show up on Kakao every week, according to the company’s website.
Money from public markets could help the KakaoTalk app compete with other messaging apps, like Viber, GroupMe, Line, Telegram, and, of course, WhatsApp, which Facebook bought in February for a whopping $19 billion. The deal has been the talk of Silicon Valley for months. Now foreign rival Kakao could gain prominence and expand its user base as a result of the deal.
Kakao had 140 million users as of April, the Wall Street Journal said. WhatsApp hit the 500 million-user mark in April.
The original Kakao app launched in 2010.
The new company will unite 600 Kakao employees with 2,600 from Daum, according to a statement on the deal.