This is just the first step as Kakao Pay plans to acquire an additional 31.1% stake in Siebert depending on shareholder and regulatory approval. If it goes through, Kakao Pay would become one of the largest shareholders of Siebert, owning a 51% stake in total. According to sources cited by TechCrunch, the second transaction is expected to close in the first quarter of 2024.
Kakao’s strategy for expansion in the US
Kakao Pay first launched its mobile payment service in 2014. It was spun off from Kakao Corp in 2017 and it is now one of the major mobile payment players in South Korea. The Korean fintech firm offers online and offline payments, money transfer, credit rating, insurance, and loan services to approximately 40 million registered users in South Korea. Siebert Financial, the US-based brokerage and financial advisory firm, and its subsidiaries have been providing financial services for over 50 years. One of its subsidiaries, Muriel Siebert & Co (MSCO), has more than 100,000 customers.
This acquisition represents Kakao Pay’s first M&A transaction outside of its home market. It is part of a bigger strategy as the company plans to expand to the US market and strengthen its brokerage unit Kakao Securities at the same time.
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.’
Kakao Pay will integrate its technology expertise into the financial services of Siebert as part of the strategic partnership to offer an advanced user experience through extended market access to US securities, lower securities trading fees, and more. Kakao Pay currently offers payment services in South Korea, Japan, Macao, Singapore, France, and China.
Officials from Siebert Financial said that the partnership with Kakao Pay will provide them with significant financial resources to opportunistically invest in their key business lines while leveraging the expertise and technological capabilities of Kakao Pay to expand their reach and enhance their technology offerings.
