Joyce Lee and Jihoon Lee

SEOUL (Reuters). South Korea’s Kakao Pay Corp shares saw a double-digit increase in their value since their initial public offer (IPO) on Wednesday. Investors were excited by the fintech’s anticipated growth in transactions.

Kakao Pay shares opened on 180,000 won versus an IPO cost of 90,000. It gained to 187.500 won during early trade. From its IPO, the financial technology company raised 1.5 trillion won (1.27 billion).

Kakao Pay is backed by China Ant Group and will use 854 billion won (724.66 millions) to fund mergers and acquisitions.

Kakao Corp (South Korea’s most popular chat app) is still a large shareholder holding approximately 48%. Ant Group’s Alipay Singapore Holding holds a 39% share. Some of its shares are available for trading without any lockup periods.

Kakao Pay began payments services in 2014 and saw an annual increase of approximately 48 trillion won per year to 67 billion won in 2020. Analysts believe that transaction volume will rise sharply to 100 trillion won per year by 2021.

Kakao Pay had pushed its IPO back to November. They also lowered their indicative price range. South Korean regulators stated that apps for financial platforms needed to be registered or licensed to provide recommendation and product comparison services.

Shin Wonkeun, Kakao Pay’s chief strategy officer Shin Wonkeun said that regulations could be a great way to build consumer trust at a press conference.

Besides raising money for M&A, it is also preparing mobile stock trading services and seeking partnerships with global fintech companies to target potential overseas markets such as China, Southeast Asia and Europe, Kakao Pay said.

Due to high domestic investor demand, South Korean IPOs have seen a surge in popularity and volatility. The IPOs in South Korea have attracted more than four-times the amount of funds raised in 2020.

$1 = 1,178.8900 won