Korean Kakao’s Podotree raises $107 million to grow its webtoons
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Image Credit: Podotree

Image Credit: Podotree

The company wants to expand its content presence online in video as well

Podotree, the content creation business of South Korea’s Kakao, has raised $106.5 million in a new round that values the entity at $428 million.

Podotree has already raised $107 million. This is a big deal for Podotree, since before now it had raised only $9.9 million from 2012 to 2016, according to data from Crunchbase.

The round is led by Anchor Equity Partners, and Singapore’s GIC Private Limited investment fund is also participating, among other, undisclosed partners. Both have come together to invest on South Korean companies before, with GIC taking part in Anchor’s $500 million debut fund that closed last year.

Podotree is separate from Anchor has been aggressive in the Korean market, its other main ICT investment to day being the mobile commerce company Ticket Monster, which it purchased a stake in from Groupon alongside KKR.

Kakao acquired Podotree in 2015, and its Founder, Lee Jin-soo, is Vice President of Content at the company. It also acquired, since merging with Daum in 2014, the US social media company Path and a controlling stake in Korea’s digital music market leader, LOEN Entertainment.

Kakao’s other businesses, including its popular KakaoTalk messenger app, focus on content development for Kakao Page and Daum Webtoons, the latter of which it set up as a distinct entity within the company this September. According to the Korea Times, the rationale was that the entity would “expand its business from cartoon platform operations to investment, joint production and global copyright businesses regarding derivative works of cartoon content.”

Image Credit: Podotree

Image Credit: Podotree

It is expected to benefit the most from the new funds, with Tech Crunch reporting, “The money will go towards growing the Webtoon business, acquiring new IP and licensing rights, and expanding into video content.”

Since they’re run through search engines, Kakao’s main Webtoon competitor is Naver. As Tech Crunch notes, the two are also competing to make investments to buttress their core businesses, with Naver and Softbank launching a $43 million fund last month with a focus on Webtoons and Naver’s photo app, Snow.

Webtoons, which as an industry were worth $256 million in 2015, have a particularly strong presence in South Korea as an entertainment medium, with a number of series making the jump to TV in recent years. Their business model is unique in that, according to TV Tropes, “Although they do not have publishers, as such, they are funded through the hosts. Every click still counts, even if the model isn’t that of a personally owned project or business variety.”

Due to South Korea’s high Internet penetration rate, intense competition among content creators, and supportive government policies, the comics business is booming. Beyond investing in content creation, Kakao next plans to develop a mobile advertising service.

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