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Kakao Entertainment to acquire US web novel platform Radish Fiction
Kakao Entertainment is making its moves to acquire Radish Fiction, an English web novel platform that was founded in late 2015. It is one of the top five fiction apps in the U.S. today in terms of sales.
KaKao confirms acquisition plans
Previously, it has secured a $63.2 million or KRW76 billion investment led by investors KakaoPage Corp. and SoftBank Ventures Asia, as per Korea’s Infostock Daily. The huge funding was signed just last year.
This week, it was reported that KaKao Entertainment has now decided to acquire Radish and the company confirmed this by saying, "It is true that we are pursuing the acquisition of Radish, but the other procedures should be completed.”
Apparently, the negotiation for the purchase of Radish Fiction’s management rights is ongoing. KaKao is shelling out $354 million or about KRW400 billion if the deal will be successful. The two companies have been on the negotiating table and this was revealed by sources last weekend.
The potential outcome of the buyout
Kakao already owns a 12% stake in Radish due to its investment last year. In February, the company purchased more stakes from other investors and this effectively increased its ownership of the US-based company.
Now, with this new buyout, Korea Economic Daily reported that a successful deal will make Radish Kakao’s biggest acquisition since it bought Loen Entertainment for KRW1.9 trillion in 2016.
At any rate, once Kakao Entertainment closed the deal and acquires Radish Fiction, it will surely enter another intense competition with its rival, Naver Corp. This is because the company also bought Wattpad earlier this year for $600 million. This means Kakao and Naver will ignite a new rivalry and this time in the storytelling business.
Meanwhile, Radish is a startup offering serialized storytelling services. It was founded by Seung Yoon Lee who also serves as its CEO. Radish immediately attracted many users and with its one million active users and four million downloads, it was able to churn out revenue of KRW23 billion in 2020.
Radish said it is aspiring to be like Netflix that produced its own original series. Currently, it has created 6,500 episodes from its more than 30 originals.