This article was displayed on the ChosunBiz MoneyMove (MM) site at 4:23 p.m. on May 26, 2026.
Kakao sold AXZ, the operator of the portal "Daum," to Upstage and received about 10% equity in Upstage. This came as it chose a stock exchange method, selling its entire equity and receiving new shares in Upstage. Upstage recently received approval for a business combination review, completing the final transaction.
According to the investment banking (IB) industry on the 26th, Kakao recently agreed with Upstage on the scale of the stock exchange and completed the transaction. Upstage acquired all of AXZ's equity, and Kakao received new Upstage shares in a stock exchange transaction, securing about 10% equity in Upstage.
This reflects the roughly 2 trillion won post-money valuation Upstage received in its recent pre-IPO fundraising from SK Networks, Sazay Partners, and Woori Venture Partners, valuing Kakao's 10% equity in AXZ at about 200 billion won.
AXZ was established as a wholly owned subsidiary in May last year when Kakao spun off the Contents CIC. News, search, cafes, and mail on Daum are its core services, and Kakao initially set the service transfer price at 7 billion won when AXZ was founded. It later conducted an asset revaluation and raised the transfer price to about 194.4 billion won.
The effective transaction consideration for AXZ was set slightly higher than the Daum service transfer price (about 194.4 billion won) calculated by Kakao. The fact that this was a stock exchange transaction with no cash payment acted as a premium factor. It jumped to about 29 times the 7 billion won Kakao set as the Daum service transfer price in May last year.
An industry source said, "There had been expectations that Kakao would secure up to around 25% equity, but as Upstage's valuation surged with the matching investment secured from the Public Growth Fund, it was adjusted," adding, "Upstage received a total of 560 billion won in investment from the Public Growth Fund and others."
Upstage is an AI service development startup founded in 2020 by Chief Executive Kim Seong-hun, who led the artificial intelligence (AI) development organization at Naver. With its homegrown large language model (LLM) "Solar," it has focused on the business-to-business (B2B) AI service market in finance, law, and manufacturing.
The company plans to accelerate the popularization of AI services with the acquisition of AXZ, the operator of the portal Daum. It is also understood to have set a goal of creating a so-called "AI-native portal" differentiated from Naver and Google by combining the Solar LLM with Daum's search infrastructure and content data such as news and cafes.
The key point to watch is Upstage's initial public offering (IPO). Upstage is said to have presented a post-listing valuation of up to 5 trillion won at a recent investor relations (IR) session for institutional investors. If it lists at a 5 trillion won valuation, the value of Kakao's roughly 10% equity could rise to about 500 billion won.
An IB industry source said, "Kakao converting portal assets into equity in an AI company without cash is essentially a transaction that simultaneously designs business restructuring and investment returns," adding, "If Upstage succeeds in its IPO, Kakao has structured it to expect a significant increase in equity value."
Meanwhile, Upstage's acquisition of AXZ also received a business combination review approval from the Korea Fair Trade Commission (FTC). After examining concerns about market monopolization and whether other AI companies could use data accumulated by Daum as training data, the FTC reached a final approval decision in mid-month.