Alibaba Group Holding Limited (NYSE: BABA) subsidiary, Ant Financial, which manages Alipay and Alibaba’s digital banking business, announced that it will make an investment of $200 million in Kakao Pay, which is a new fintech division that will be launched by Kakao, the dominant messaging service in Korea.
The investment will help Alibaba’s Ant Financial to offer financial services in Korean market through Kakao Pay. In addition, the deal will also help Ant Financial to expand into offline banking and financial services. Currently, Kakao has more than 14 million members, through the deal, Ant Financial will connect its 450 million global users with Kakao Pay.
“South Korea is an important market for Ant Financial in its global expansion, and we see many opportunities in the market for innovative services and growth in mobile payments,” said Douglas Feagin, the president of Ant Financial International.
Last April, Ant Financial attracted a $60 billion valuation in the $4.5 billion fund raising round, and since then, Ant began to expand at home and worldwide for a IPO that could be later this year.
The deal is not only helpful for Ant Financial and Kakao Pay, it will also be beneficial to parent company, Alibaba. The deal will help Alibaba to deepen its influence of e-commerce services in Korea, and Chinese investors will use Alipay much easier in Korea.