Merger as Kakao Entertainment (2021–present) and reorganisation
In December 2020, Kakao was reported to be considering a merger of its content subsidiaries Kakao Page and Kakao M ahead of Kakao Page's planned initial public offering. The proposed combination was intended to consolidate Kakao's webtoon, web novel, music and video businesses and strengthen the value of its content intellectual property. At the time, the two companies had combined 2019 revenue of approximately ₩610 billion (US$455.13 million) and operating income of about ₩50 billion (US$37.31 million). The merger was also reported in the context of Google's planned expansion of its in-app payment fees, which was expected to affect Kakao's digital-content businesses.
In January 2021, the boards of Kakao Page and Kakao M formally approved the merger, creating Kakao Entertainment. The merger was completed on March 1, 2021, with the new company combining Kakao Page's webtoon and web novel intellectual property and digital platforms with Kakao M's music, film, television, performance and talent-management businesses. The resulting company comprised approximately 50 subsidiaries and affiliates and was established to integrate content production and distribution and expand internationally.
In May, Kakao Entertainment agreed to acquire U.S.-based serialized-fiction platform Radish for approximately US$440 million. Founded in 2016, Radish specialized in mobile fiction and serialized storytelling, with a catalogue that included original works and content from Korean and other international creators. The acquisition followed Kakao Entertainment's intended to expand its intellectual-property business and presence in the North American market, and a part of Kakao Entertainment's broader international expansion in digital storytelling. Later in 2021, the company also acquired U.S. webtoon platform Tapas, further expanding its North American webtoon and web novel operations.
In July 2021, Kakao Entertainment and Melon Company approved a merger, which was completed on 1 September 2021 following shareholder approval. Melon joined Kakao Entertainment as a company-in-company (CIC), with Lee Je-wook appointed to lead the Melon business. The merger combined Kakao Entertainment's content production and intellectual property businesses with Melon's digital music platform, strengthening its music distribution and artist-related operations.
In September 2021, Kakao Entertainment announced the merger of its music-label subsidiaries Play M Entertainment and Cre.ker Entertainment, named IST Entertainment. The merger was intended to consolidate the companies' artist and production capabilities within Kakao Entertainment's multi-label system and was scheduled for completion by the end of the year. Play M represented artists including Apink, Huh Gak, Victon and Weeekly, while Cre.ker represented The Boyz. The new label was jointly led by Play M's Jang Hyun-jin and Cre.ker's Yoon Young-ro.
In January 2023, Kakao Entertainment secured an investment of ₩1.2 trillion (US$895.34 million) from sovereign wealth funds associated with Saudi Arabia and Singapore. The investment, reported as one of the largest overseas financing deals for a South Korean content company at the time, was intended to support the company's international expansion and potential mergers and acquisitions. The funds were reported to include investments of ₩600 billion (US$447.67 million) each from Saudi Arabia's Public Investment Fund and Singapore's Government of Singapore Investment Corporation (GIC), although Kakao's initial announcement did not identify the investors by name.
In April 2025, Kakao Entertainment began divesting several loss-making subsidiaries and content platforms as part of efforts to improve its financial position. In February, it sold Next Level Studio, a webtoon and web novel platform acquired in 2022, to an unidentified domestic content company, and sold K-pop agency IST Entertainment to Beyond Music for ₩26.7 billion (US$19.92 million). It also disposed of its 50.07% stake in 3Y Corporation, the company behind the girl group QWER, for ₩8.7 billion (US$6.49 million). The company was also winding down its North American digital content businesses, including Tapas Media and Radish Fiction, which it had acquired in 2021. The divestments formed part of a broader reversal of its acquisition-led expansion strategy, which had increased its subsidiary count from 14 in 2020 to 53 in 2022.
Despite speculation that the restructuring could revive its initial public offering (IPO) plans, Kakao Corporation subsequently moved towards selling a majority stake in Kakao Entertainment rather than pursuing a public listing. In a letter to major financial investors, Kakao reportedly outlined plans to sell its controlling interest following a decline in stock market valuations. Potential buyers were reported to include gaming companies, entertainment groups and private equity firms. Kakao had previously considered a Nasdaq listing for the company, while its domestic IPO plans had remained on hold since 2021.
In July 2026, Anchor Equity Partners began seeking to divest its stake in Kakao Entertainment after plans for a potential initial public offering stalled and an attempted sale failed to result in a transaction. The private equity firm has also pursued refinancing for a loan backed by its investment, which is scheduled to mature at the end of the year. The refinancing discussions, coordinated by JB Woori Capital, came amid rising borrowing costs and limited options for exiting the investment..
In September, Kakao Entertainment announced plans to wind down Tapas, following the closure of Radish in 2025. Kakao Entertainment had acquired Tapas and Radish in 2021 for a combined approximately ₩1.1 trillion (US$820.73 million), but subsequently scaled back its strategy of directly operating content platforms in North America. Tapas had previously recorded a ₩46 billion (US$34.32 million) goodwill impairment in 2023. The closure forms part of a broader restructuring in which Kakao Entertainment plans to consolidate its webtoon and web novel services around KakaoPage by the end of 2026. The company said the integration would combine content, user data, artificial intelligence and operational capabilities across its platforms. Its international strategy is increasingly focused on intellectual property and established businesses such as Piccoma in Japan rather than direct operation of overseas platforms. The restructuring coincides with Kakao's proposed 2027 corporate split into Kakao AI and Kakao X. Kakao Entertainment is expected to become part of Kakao X, alongside other entertainment and investment businesses, with the company pursuing further efficiency measures and consolidation of its content operations.
In October, Kakao Entertainment entered into a strategic partnership with Atlantic Music Group, a subsidiary of Warner Music Group, to develop K-pop artists and expand their presence in international markets. The agreement focuses on artist development from the early stages of their careers, combining Kakao Entertainment's expertise in K-pop artist management, music production and intellectual property development with Atlantic Music Group's artist-and-repertoire capabilities and international industry network. The companies plan to collaborate on music production, songwriting camps, artist collaborations, digital marketing and promotional activities to help artists reach audiences outside South Korea, particularly in North America. The financial terms of the agreement and the artists involved were not publicly disclosed at the time of the announcement.
₩1.19 trillion (US$889.37 million) (2025)
