Kakao Pay, the online payment service of South Korean messaging and internet giant Kakao, purchased a stake in New York-based brokerage Siebert Financial. Kakao bought 19.9% of Siebert for $17 million.
Kakao Pay aims to buy a 31.1% interest in Siebert if shareholders and regulators approve. If approved, Kakao Pay would acquire 51% of Siebert. Siebert’s controlling shareholder and board member Gloria Gebbia told TechCrunch the second deal will conclude in the first quarter of 2024.
Kakao Pay began mobile payments in 2014. It became a big mobile payment provider in South Korea after being split from Kakao Corp in 2017. The Korean fintech startup serves 40 million South Korean consumers with online and offline payments, money transfers, credit ratings, insurance, and loans. For over 50 years, Siebert Financial and its subsidiaries have provided financial services. MSCO has almost 100,000 clients.
Kakao Pay made its first international M&A today. The business intends to enter the U.S. market and boost Kakao Securities.
“Kakao Pay plans to create a new overseas stock trading solution that combines the user-centric MTS (money transfer services) of Kakao Securities with Siebert’s brokerage’s infrastructure, which could be expanded to foreign fintech companies, including those in Southeast Asia,” Gebbia told TechCrunch.
Gebbia said the collaborative relationship would deliver “an advanced user experience through extended market access to U.S. securities, lower securities trading fees and more” by integrating Kakao Pay’s technology with Siebert’s financial services.
“Kakao Pay has attained a great opportunity to expand its financial business abroad by making a strategic investment in Siebert, a company with over 55 years of tradition and experience,” said Kakao Pay CEO Won-Keun Shin. South Korea, Japan, Macao, Singapore, France, and China use Kakao Pay.
The Gebbia family will continue to run Siebert. TechCrunch said that the 120-person crew will stay. Gebbia added, “We do not expect this transaction to affect day-to-day jobs and will continue to operate the business in a way that drives long-term success for our customers and employees. A Kakao Pay spokesman reported 1,130 employees.
“The partnership with Kakao Pay will provide us with significant financial resources to opportunistically invest in our key business lines while leveraging the expertise and technological capabilities of Kakao Pay to expand our reach and enhance our technology offerings,” Gebbia said.
