Kakao Pay, a fintech company based in Korea, has announced its plans to acquire a controlling interest in the US brokerage firm, Siebert.
Kakao Pay, the online payment service owned by South Korean messaging and internet giant Kakao, has acquired a 19.9% stake in the New York-based brokerage firm, Siebert Financial, for $17 million. Pending shareholder and regulatory approval, Kakao Pay plans to acquire an additional 31.1% stake in Siebert, becoming its largest shareholder with a total stake of 51%. This marks the first M&A transaction outside of Korea for Kakao Pay, which plans to expand to the US market and strengthen its brokerage unit Kakao Securities.
The strategic partnership will integrate Kakao Pay’s technology expertise into the financial services of Siebert, offering an advanced user experience through extended market access to US securities, lower securities trading fees, and more. Kakao Pay’s CEO, Won-Keun Shin, stated that the acquisition gives Kakao Pay a great opportunity to expand its financial business abroad. The deal is expected to be finalized in the first quarter of 2024.
In 2014, Kakao Pay launched its mobile payment service and has since become one of the major mobile payment providers in South Korea, offering a range of financial services to around 40 million registered users. Siebert Financial and its subsidiaries have been providing financial services for over 50 years, with one of its subsidiaries, Muriel Siebert & Co (MSCO), serving over 100,000 customers.
The acquisition of a stake in Siebert Financial represents Kakao Pay’s first M&A transaction outside of Korea, and is part of its strategy to expand into the US market and strengthen its brokerage unit, Kakao Securities. The partnership will create a new overseas stock trading solution that combines the user-centric MTS of Kakao Securities with Siebert’s brokerage infrastructure, which could be expanded to foreign fintech companies, including those in Southeast Asia.
As part of a strategic partnership, Siebert and Kakao Pay will combine their technology and financial expertise to offer an enhanced user experience that includes extended market access to U.S. securities, reduced securities trading fees, and more, according to Gebbia. Kakao Pay’s CEO, Won-Keun Shin, stated that the strategic investment in Siebert presents an excellent opportunity for Kakao Pay to expand its financial business overseas, given Siebert’s over 55 years of tradition and experience.
At present, Kakao Pay provides payment services in South Korea, Japan, Macao, Singapore, France, and China.
According to TechCrunch, Siebert’s management team, headed by the Gebbia family, will remain in charge of the company after the transaction. Both firms have confirmed that the 120-person workforce will remain unchanged following the deal’s completion, and the day-to-day operations will not be impacted. Gebbia assured that the business will continue to operate in a way that fosters long-term growth for both customers and employees.
According to a spokesperson for Kakao Pay, the company has a workforce of 1,130 people.
In a statement, Gebbia remarked that the collaboration with Kakao Pay would give them substantial financial resources to invest in their primary business lines, while also utilizing Kakao Pay’s expertise and technological capabilities to expand their reach and enhance their technology offerings.
