Today Bloomberg revealed that Ground X, Kakao’s crypto unit, raised $90 million through a private coin offering. Kakao is South Korea’s biggest messaging company similar to China’s WeChat and to a lesser extent WhatsApp, but with far more functionality. The unit is planning another round of funding starting from March 12 in preparation for the launch of its new blockchain platform, Klaytn, in June.
Klaytn is Ground X’s initiative to improve the user and developer experience of using a blockchain platform. The aim is to eliminate some of the current blockchain features that are not user-friendly, such as private keys, wallets and cryptographic addresses. Klaytn focuses on creating a more seamless platform to encourage the adoption of blockchain technology.
In December 2018, Kakao announced plans to raise $300 million to develop its own token through Ground X. According to Jason Han, CEO of Ground X, this fundraising round reached its targets. Investors included IDG Capital, Cresendo Equity Partners and Translink Capital.
Ground X is partnering with 26 companies, many of which have millions of daily users. Examples include Korean games developer Wemade Entertainment, streaming service Watcha, and luxury travel agency Zanadu. Partners also include areas such as health and insurance.
Kakao Corp is one of South Korea’s largest online conglomerates, mostly known for Kakao Talk. The messenger app started in 2010, and the current organization was formed through a 2014 merger with the Daum web portal. The company has expanded its capabilities to include services such as KaKaoStory and KakaoTaxi.
The company’s revenue in 2018 was 2.4 trillion Korean Won ($2.13 billion), a 22% increase compared to 2017. The profit before tax was $117 million. The income is made up of advertising (27%), content such as music and games (47%), and other sources of income such as e-commerce and payments (26%)
Other social network tokens
Other social network coin offerings have had mixed success.
Kik was the first large social network to launch an ICO, when they raised $100 million in September 2017. However, 18 months later, the market cap for Kin has dropped from a peak of $1 billion down to the current value of $17.9 million.
Telegram, the secure chat app which reportedly has more than 200 million monthly users, raised $1.7 billion based on little more than a whitepaper. On January 28th, it announced that the blockchain platform was 90% of the way towards completion of a test version.