KakaoBank, an internet-only bank in South Korea, has made a strategic investment in Naivy, a fintech startup specializing in music marketing services.
The bank acquired a 14.99% stake in Naivy for KRW 908 million (approx. USD $680,000), The Korea Times reported Monday (August 20), citing a company spokesperson.
KakaoBank is a subsidiary of tech giant Kakao Corp. Last year, Kakao took a 39.9% stake in K-pop agency SM Entertainment. It also controls Melon, South Korea’s largest music streaming service.
“We decided to invest in Naivy to support fintech startups with outstanding technology,” the Kakaobank spokesperson was quoted by the Korea Times as saying.
Naivy operates the PLAM app, which offers users cash incentives for listening to music. This approach aims to promote artists and their songs while providing a rewarding experience for users.
News of the acquisition came about a week after KakaoBank launched a new service where users can “listen to music and earn cash” within the KakaoBank app. The service is operated in collaboration with Naivy, the bank said in an announcement on its website.
Users will be able to access the PLAM app directly within the KakaoBank app. After listening to songs and leaving short reviews, they will receive KRW 10 won (USD $0.007) or KRW 20 ($0.014) per song directly into their KakaoBank account. This integration eliminates the need for users to download additional apps.
“We decided to invest in Naivy to support fintech startups with outstanding technology.”
Kakaobank Spokesperson
According to local media, in addition to KakaoBank, Naivy also attracted investment from entertainment company RBW, a record label, talent agency, music production firm, event manager, concert producer, and music publishing house based in Seoul. It is home to artists including Mamamoo, KARA and B1A4.
KakaoBank has a track record of investing in fintech startups and integratingtheir services into its banking app, The Korea Times said. In January 2023, the bank bought a 14.99% stake in Nulleesoft, a company that operates an algorithmic tax reporting service. By integrating this service into its app, the bank has been able to offer customers a way to manage their tax obligations.
“We will continue working to create a convenient and secure financial service environment based on mutual growth,” a KakaoBank official was quoted by the newswire as saying.
Last month, South Korean authorities arrested Kakao Corp.’s billionaire founder, Kim Beom-su, on allegations of manipulating stock prices during the company’s acquisition of a stake in SM Entertainment last year.
The arrest threatens the status of Kakao as the largest shareholder in KakaoBank, as Korean law restricts those who have been convicted of a financial crime from holding more than a 10% stake in a bank, Reuters reported at the time.
Kakao currently holds a 27.17% controlling stake in KakaoBank, The Korea Times said. The company could reportedly be ordered to cut its stake to 10%.
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