Korea’s Kakao buys fiction platform Radish, comic app Tapas for $950m

Kakao Entertainment, a unit of the Korean internet giant Kakao, has acquired Radish, a mobile fiction platform backed by Softbank Ventures Asia, in a $440 million transaction. The South Korean entertainment firm is also acquiring US-based online comic app Tapas for $510 million, Reuters reported.

The acquisition of Radish will strengthenKakao Entertainment’s global webtoons and web novel business and expand itsreach in North America and other English-speaking territories, SoftbankVentures Asia said in a statement on Tuesday. Meanwhile, Tapas’ strengthin “webtoons” led to a five-fold jump in sales in 2020, Kakao said.

Softbank Ventures Asia, along with Kakao Page, had led a $63.2 million Series A funding round in Radish in August last year. Radish’s original investors include Lowercase Capital, K50 Ventures, billionaire investor Nicolas Berggruen, former Microsoft executive Charlie Songhurst, BDA Chairman Duncan Clark as well as the bestselling author Amy Tan.

Founded in 2016, Radish is a Netflix ofsorts for reading. Its stories are serialised and published in bite-sizedinstallments for reading on a smartphone. Readers can access thousands ofserials across genres for a fee and also connect directly with their favoritestorytellers in live community chat rooms.

Authors can publish their own originalstories, revive backlist titles with a mobile readership, and pre-releaseupcoming books.

The company claims that it experiencedexplosive growth following a strategic move in 2018 to begin producing in-house“Radish Original” series alongside curated content. In 2020, revenues grew over10 times, compared with the previous year.

“We see even greater growth potential.Radish has found enormous success with fast-paced, original mobile content andundergone dramatic growth with a ten-fold increase in annual revenue lastyear,” said Jinsoo Lee, CEO of Kakao Entertainment. “Combining Kakao’sexpertise in the IP business and Radish’s strong North American foothold, weare excited about what we can achieve together,” he added.

After the acquisition, the company willmaintain management autonomy and continue to operate under the Radish brand. Inaddition to continuing to helm the company, founder and CEO Seungyoon Lee willserve as the global strategy officer of Kakao Entertainment.

Kakao Entertainment operates mobilecontent platforms in Korea, providing users access to over 80,000 IPs,including the most extensive library of original content in the country. It hasa presence in Japan, North America, Greater China, Southeast Asia, and India.

In April, Kakao Corporation acquired Croquis, the operator of fashion shopping platform ZigZag, for an undisclosed amount. The plan is to spin off Kakao’s style business division from its subsidiary Kakao Commerce and then merge it with Croquis.

Kakao Entertainment is planning an IPO onthe Korean exchange and also looking at New York as a secondary listinglocation, its chief executive Lee Jinsoo told Bloomberg last month. A float couldvalue the company at more than 20 trillion won ($17.8 billion), the CEO hadsaid at the time.