Chasing after Line, Daum Kakao to put $90M into startups in the coming year

Startups in need of funding, here’s some good news just in time for Christmas. Following the lead of messaging app Line, the company behind rival app KakaoTalk is creating an investment firm – called K Venture Group – with KRW 100 billion (US$90.8 million) in its bank to seek out promising startups.

KakaoTalk is now under the wing of South Korea’s newly merged Daum Kakao. By creating this fund, it hopes to find “new sources of growth for Daum Kakao” and move away from its core messaging service, according to Yonhap News Agency.

K Venture Group will be making investments both at home and overseas, according to an official statement. “The investment will not be just temporal. We will make long-term investments on competitive ventures that have potential in domestic and global markets.”

Daum Kakao is following closely in the footsteps of its Japanese counterpart and rival by expanding into more areas of mobile commerce. Just last week, KakaoTalk revealed that it will be launching a taxi hailing service called Kakao Taxi in the first quarter of 2015 – just two months after Line did the same. With its overall revenue dropping six percent year-on-year – according to its latest earnings report – it seems that Daum Kakao is finally coming to the realization that it needs to diversify to be more competitive.

KakaoTalk itself brought in almost KRW 30 billion (US$27.3 million) in profits last quarter, riding on the strength of its gaming platform, KakaoGames, which has over 20 million active users. Meanwhile, Daum had a profit margin of only 0.5 percent, despite pulling in a revenue of KRW 133.5 billion (US$122 million).

See: Daum and Kakao merge, massive valuation puts them head-to-head with Naver-Line