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Kakao’s Crypto Arm Rakes in $90 Million Through Members-Only ICO

Last Updated March 4, 2021 3:19 PM
Gerelyn Terzo
Last Updated March 4, 2021 3:19 PM

In yet another sign that the Crypto Winter is beginning to thaw, fundraising in the industry is once again alive and well. Ground X Corp, which is the crypto arm of South Korea-based mobile giant Kakao, has raised a cool $90 million in a private coin offering and is targeting the same amount in yet another fundraising round expected to kick off this week, Bloomberg reports . Ground X’s decision not to pursue a public crowdsale could be indicative of the regulatory ambiguity surrounding ICOs.

Kakao-Backed Ground X Raises Major Capital Through Crypto Token Sale

crypto, kakao, ground x
Ground X raised a cool $90 million, suggesting that Crypto Winter may be beginning to thaw. | Source: Shutterstock

Ground X is behind a public blockchain called Klaytn, which after being delayed last year is expected to make its debut in June. While the token sale was not public, big investors were lining up regardless of the approximately 80% decline in the bitcoin price since the peak.

Ground X’s private token sale unfolded over a three-month stretch at year-end 2018, attracting institutional investors across private equity and venture capital including China-Focused IDG Capital, South Korea-based Crescendo Equity Partners, and U.S.-based Translink Capital, the latter of which is dedicated to helping entrepreneurs establish partnerships in Asia. They are making a bet on Klaytn, not to mention the balance-sheet muscle of parent company Kakao, whose messaging app KakaoTalk dominates among smartphone users in South Korea.

Kakao & the Klaytn Blockchain

While the Klaytn blockchain has yet to launch, Ground X has already attracted some high profile partners, some of which boast millions of daily active users, a key metric in measuring and ranking traffic. Groud X’s parent company Kakao is exploring the possibility of adding one of its products to Klaytn, which could be Kakao Talk, Kakao Games, or music content service Melon, to name a few, all of which could be tokenized.

Ground X CEO Jason Han recently told CNBC  that “if Kakao wants to transfer their services onto the blockchain, there is lots of work to do,” adding that some of the company’s services are more conducive to the blockchain than others.

Among Ground X’s more than two dozen partners include Seoul-based video game developer Wemade Entertainment, video streaming startup Watcha Inc. (in which, incidentally, Kakao ventures is a backer), and Zanadu, an online travel agency focused on Chinese travelers.

The Klaytn blockchain seeks to distinguish itself from other networks by skipping the need for “wallets, private keys, and cryptograph addresses,”  which they expect will make it more accessible to mainstream users and which could explain the launch delays. Ground X’s silver bullet seems to be “enhanced speed and performance of decentralized apps” on the platform, as evidenced by a block interval of less than one second and as many as 1,500 transactions per second.

Ground X has ambitious plans, with expectations to grow its number of users to 10 million over the next 12 months, which CEO Han suggests is a function of the services that are building dApps on Klaytn having already achieved wide-scale adoption.