[Edaily Reporter Lee So-Hyun ] Kakao(035720)’s decision on the 21st to undergo a major corporate restructuring through a spin-off was based on the assessment that, as the business has grown in scale and complexity, it has become difficult to swiftly execute strategies for each business unit under a single decision-making system.

Throughout the mobile era, Kakao has expanded its business into areas such as finance, content, and mobility based on KakaoTalk. However, the company explained that as the scale and complexity of its operations grew, structural limitations arose in operating businesses with different characteristics and at different stages of growth within a single company.

Consequently, over the past two years, Kakao has streamlined its non-core businesses, significantly reduced the number of affiliates, and reorganized its governance structure to focus on growth businesses. This spin-off is a follow-up measure to finalize this structural reorganization and establish an execution speed and capital allocation system suited for the AI era.

The key is to separate two business groups with distinct characteristics. Kakao believes that the market has already established different evaluation criteria and investment preferences for its KakaoTalk- and AI-centric platform business versus its vertical businesses, such as techfin, content, and mobility. The company concluded that operating these two areas under separate management structures is the best way to enhance business competitiveness and corporate value.

Following the split, the newly established Kakao AI will focus on KakaoTalk and AI. It will be responsible for evolving KakaoTalk into an “agent-based AI interface” that understands the intentions and context of its approximately 50 million users, and for creating new user experiences and revenue models by integrating AI, advertising, and commerce. Its goal is to achieve more than 20 million daily active users for AI and revenue of over 6 trillion won by 2030.

The surviving entity, Kakao X, will focus on the growth of its fintech, content, and mobility businesses, as well as new investments. It will leverage subsidiaries such as KakaoBank Corp., #kakaopay, Kakao Entertainment, SM Entertainment, and Kakao Mobility, while also exploring new growth areas including virtual assets, physical AI, and global fandom. The company plans to utilize approximately 2.3 trillion won raised through the liquidation of held assets, along with approximately 4.1 trillion won in investment funds held by its subsidiaries.

Another objective is to enable the market to evaluate the value of each business segment more clearly. The average consensus of the Sum-of-the-Parts (SOTP) valuation presented by Kakao from domestic and international securities firms in August of this year is 34.2 trillion won. This is 17.4 trillion won higher than Kakao’s average market capitalization of 16.8 trillion won over the past three months. Following the spin-off, Kakao plans to track the performance and financial information of each company separately and regularly disclose key metrics—such as revenue, profitability, investment execution, and shareholder returns—as well as its capital allocation principles.

Ultimately, this spin-off is a strategic decision to reorganize the distinct businesses that were previously housed within a single Kakao into two independent growth engines, thereby accelerating decision-making and establishing growth strategies and capital allocation systems tailored to each business. Through this, Kakao aims to create a structure where each business can focus on its core growth objectives and where the market can evaluate the value of each business more transparently and appropriately.

Meanwhile, Kakao plans to complete the spin-off on January 1, 2027, following an extraordinary general meeting of shareholders scheduled for December 17. Kakao AI will be relisted on the 27th of the same month, while Kakao X will pursue a re-listing. The company plans to maintain employment, working conditions, employee benefits, and business continuity even after the spin-off.

The companies have also outlined their mid- to long-term goals. Kakao AI plans to secure more than 20 million daily active users (DAU) for its AI services by 2030 and increase platform engagement time by more than 50%. It aims to expand AI revenue to account for a double-digit percentage of total revenue by 2028 and exceed 1 trillion won by 2030.

Kakao X will identify new growth engines by utilizing approximately 2.3 trillion won raised through the monetization of its assets, as well as approximately 4.1 trillion won in investment funds held by its subsidiaries. The company aims to achieve an average annual growth rate of 13.3% in revenue from its core businesses by 2030.

Regarding shareholder return policies, Kakao AI will allocate 20–35% of its adjusted free cash flow (FCF) as the primary source of shareholder returns. Kakao X has decided to allocate 30% of dividends received from subsidiaries and 30% of capital gains toward shareholder returns. Kakao also recently announced a plan to repurchase and cancel 300 billion won worth of its own shares using the proceeds from the sale of Dunamu.