Kakao Bank raised approximately $2.2bn in its IPO. Credit: Mediamodifier from Pixabay.

South Korean digital lender Kakao Bank made its public debut with its stocks surging roughly 80% above its IPO price.

The lender raised approximately $2.2bn in its IPO. The issue size was close to 65.45 million, and the range of the offering price per share was $28.82 (WON33,000) to $34.06(WON39,000).

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On 6 August 2021,  Kakao Bank’s shares closed at $60.69 (WON69,800). With a market capitalisation topping $28bn,  Kakao Bank has become the biggest financial services firm by market value, Reuters reported.

Kakao Bank is said to be the first online-only bank in Asia trading publicly.

Kakao Bank plans to use the funds to secure capital adequacy for new products and services, such as expanding credit loans for low- to mid-credit customers and mortgage loans.

It also plans to invest WON350bn to increase team size, enhance customer experience, upgrade credit evaluation model, expand infrastructure for consumer protection, research and development of financial technology, and acquire fintech companies.

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In the mid-to-long term, it plans to enter the global market through joint ventures (JVs).

“The heavy demand was due to local institutions not getting as much as they wanted during book building and foreign firms with money earmarked for fintech investments. On top of that, it seems some funds have been rerouted here due to the cancellation of Ant Financial’s IPO and other major offerings from China amid the recent tech crackdown,” said Kim Ji-young, an analyst at Kyobo Securities told Reuters.

Founded in 2016, the bank claims that it secured one million account opening customers within five days of opening and surpassed 10 million in July 2019.

The lender said, as of the end of May this year, the total number of customers was 16.53 million.