Saudi Arabia goes big on K-pop and anime
Saudi Arabia’s Public Investment Fund (PIF) is placing a big bet by investing about $500m in Kakao Entertainment, as the kingdom looks to expand its interests in entertainment and gaming.
Kakao Entertainment is a subsidiary of Korean tech giant Kakao Corp, and produces web novels and webtoons, streams music, manages K-pop acts, and is involved in TV and film. The company owns Melon, Korea’s leading music streamer, and is reportedly in talks to acquire Korean film production company, Zip Cinema, which has turned out movies like Parasite and the Netflix series, Kingdom.
The investment gives Saudi Arabia a new foothold in a growing demand for Korean anime. Kakao has signed deals with Netflix to produce a series of shows following the global popularity of Squid Game.
The PIF, chaired by Crown Prince Mohammed bin Salman, hopes to grow its $620bn in assets to more than $1 trillion by 2025. Flush with petrodollars, Saudi Arabia and other Gulf states have become go-to destinations for start-ups and companies looking to raise capital, as recessionary concerns slow investments elsewhere.
The PIF has emerged as the main vehicle for the 37-year-old crown prince’s ambitions to remake the conservative kingdom and diversify its economy away from fossil fuels. Singapore’s sovereign wealth fund matched the PIF’s investment in Kakao.
The move follow's Mohammed bin Salman's landmark visit to South Korea in November, where the two countries reportedly signed a series of investment agreements worth $30bn. South Korea is Asia’s fourth-largest economy and a top buyer of Saudi crude.
Saudi Arabia’s young crown prince, reportedly a gamer himself, has plowed the kingdom’s oil wealth into entertainment companies.
On Thursday, a public filing showed the PIF increased its stake in Japan's Nintendo to six percent. The fund also has stakes in video game companies Nexon, Capcom and Koei Tecmo.