Recognizing the great potential that lies in blockchain technology, many global giants have continued investing in its research. One of these is South Korean internet and messaging giant Kakao. According to a new report, the firm invested $57 million in the research and development of new technology. They include artificial intelligence and blockchain technology.
According to the report by ZDNet’s South Korean publication, Kakao invested the $57 million despite making only $3.8 million in net profit. This led the company to make a net loss for the quarter.
Despite this, the company is determined to keep on investing in the research and development of emerging technology. Speaking to a local media outlet, the firm’s vice president said that this drive into new technology will be crucial in the firm’s future. Bae Jae-hyun said, “We will continue to grow our existing business and aggressively pursue new businesses to drive sales growth and improve our operating profit rapidly.”
Despite the loss, the firm recorded its highest sales record to date. Sales were up 23 percent year-on-year to stand at 2.4 trillion won ($2.1 billion) for the year and 673 billion won ($595 million) for the quarter. Its advertising, music content and online commerce platforms all registered rises in the last quarter.
Headquartered in Jeju City, Kakao is one of South Korea’s largest internet companies. The firm owns and operates KakaoTalk, a massively popular instant messaging app. It has more than 230 million registered users and accounts for 95 percent of the South Korean messaging market. The firm also has operations in taxi hailing, internet banking, music streaming, fashion and video gaming.
In December last year, Kakao invested an undisclosed amount in Orbs, an Israeli blockchain startup. This was its first investment in a blockchain startup. Orbs is developing a “hybrid blockchain network” that will be interoperable with the Ethereum blockchain.
Kakao has also been researching in and developing its blockchain network called Klaytn through its subsidiary Ground X. Klaytn promises to improve the inconvenient user experience of existing blockchains. It will eliminate traditional barriers such as the need for wallets and private keys, Kakao stated in a press release last year.
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