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Kakao, the South Korean company that has become a worldwide leader in internet and messaging technology, had already jumped into blockchain technology when they invested $57 million in the fourth quarter of 2018. Now the company is setting the stage for another big coin offering to begin their blockchain platform in June. This announcement came on the same day that Kakao announced that they had raised $90 million through a private coin offering.
Kakao had invested $57 million towards creating new artificial intelligence and blockchain technology. It was a bold move by the company, who had earned just $3.8 million in net profit during the final quarter of 2018, yet the company had the foresight to see that this is the wave of the future. Blockchain technology is the new solution to many of the cybersecurity and transaction speed issues on the internet and taking a risk could be a lucrative one.
In December, Kakao invested an undisclosed amount of money in an Israeli blockchain startup company. The foray into Orbs was the first such investment in a blockchain startup by the South Korean company.
For these reasons, it was not surprising to see that the company raised $90 million through a private coin offering geared toward instituting the new blockchain platform they believe will be operational in June. Its project is referred to as Ground X Corp and has combined with 26 companies to prepare the platform to begin operation within the next three months.
The move was a big risk by Kakao, as the value of their Bitcoin Core (BTC) had already seen a dramatic decrease since its peak in December 2017. Their sale resulted in a little less than $4000 per coin, a substantial loss compared to their original purchase price.
The company not only has developed their platform to increase cybersecurity, but they also intend to bring a wide array of services as a part of the platform, including using one or more of their messaging applications. Gaming apps are also expected to be a part of the new platform, as will existing mobile carriers and services.
Should the test of their initial platform succeed, Ground X believes that they can have a user base of better than 10 million people by the end of 2019. This is currently a company with just 65 employees, and with that kind of user base, there is no doubt that Kakao will be going through a rapid hiring initiative within the next few months. In fact, the only thing that may be standing in the way of this company’s success is a lack of support staff. It will be interesting to see how quickly they are able to put together a staff to fit the needs of their customer base.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
