According to the Korea Economic Daily, Sunday, Kakao is reviewing acquiring the managerial rights of Radish through its content producing subsidiary Kakao Entertainment. Radish is the fifth-biggest web novel platform in the United States.
Kakao also confirmed that it is in the process of acquiring Radish.
"As there are more steps in the procedure that we need to go through to close the deal, we cannot go into much detail about it," a Kakao Entertainment official said.
Kakao already invested 32.2 billion won in Radish last July for 12 percent of its shares. In February 2021, the IT giant bought further shares in Radish from venture capital firms that owned stock.
If Kakao confirms the 400 billion deal, it will become the largest shareholder of Radish.
Such a move is seen as a mark of Kakao's ambition to grow in the content IP business.
Naver took over the world's biggest social storytelling platform Wattpad in January for 653.3 billion won. Wattpad attracts 90 million monthly active users (MAU) and when combined with Naver's 72 million, Naver Webtoon has over 160 million MAU.
Naver Webtoon currently leads the webtoon industry in America. A webtoon is an animated cartoon or series of comic strips published online. In February, Naver invested 33.4 billion won in Content First, a company that operates the second-largest webtoon platform Tappytoon, to acquire 25 percent of its shares.
Kakao, on the other hand, is struggling to secure managerial rights to the No. 3 player Tapas despite the IT firm's takeover of a 40 percent share.
Kakao wants to turn the tables by acquiring Radish. It previously played a similar game in the Japanese market to catch up with Naver by fostering Japanese manga platform Piccoma.
The reason why Kakao and Naver are betting big on the web novel and web cartoon industries is because they can utilize the content to produce TV series, films or games. The IT giants can also sell the IP products to over-the-top (OTT) services.
Global OTT players such as Netflix and Disney Plus have been striving to secure quality IP content recently.
According to the Korea Creative Content Agency, the global content market for TV series and webtoons is valued at $2.29 trillion. By 2024, the agency expects the market to grow to $2.79 trillion.
In the global content industry for TV series, animations and films, America's market is the largest standing at a value of $809.8 billion.
source: The Korea Times