Business

K-pop boom makes Korea’s entertainment list hit a record high

South Korean music companies are rushing to go public to capitalize on the growing global demand for K-pop, which has pushed the list of entertainment sectors in the country to a record high.

Money raised from entertainment listings in Seoul this year hit a record $3.8 billion, according to Dealogic data, while shares of the country’s top music companies hit a high. best of all time as artists go on to live concerts and other events.

NS global popularity of K-pop stars including seven-member boy band BTS and girl group Blackpink has spurred smaller companies to rush into the market.

RBW, the music label behind girl group Mamamoo, is expected to list on Monday, after raising 26.8 billion won ($22.5 million) in an initial public offering. The IPO price is placed at the bottom of the range, with the offering being oversubscribed more than 3,700 times.

“The success of the IPO proves the importance of music IPs and our company’s growth prospects,” RBW president Kim Jin-woo told the Financial Times. “We will continue to create killer content for the global market.”

Kim said RBW plans to use the proceeds from the IPO to accelerate its global expansion by buying more music labels and IPs, and signing more artists across Asia. .

Column chart of Funds Raised (USD billion) shows Korean entertainment IPOs bringing in record funding in 2021

The company’s listing comes after K-pop fan media platform operator DearU went public in early November, DearU, which is backed by both SM and JYP Entertainment, has launched raised 85.8 billion Won in its IPO, with the listing attracting huge interest from institutional and retail investors.

Foreign investors from around 20 institutions including Singapore sovereign wealth fund GIC, JPMorgan Chase, Fidelity and Allianz attended DearU’s investor relations session for the IPO.

The attention given to small Korean companies is unusual, with most foreign investors focusing on the IPOs of large Korean corporations. More than 100 companies have raised a total of 20 trillion won through IPOs so far this year, according to Korea Exchange.

“Investors are looking for a new target in this hot field because they want to ride the Korean wave,” said Choi Joon-chul, managing director of VIP Research and Management in Seoul. “DearU is the best example of the industry’s new business model, using K-pop fandom.”

DearU’s share price has increased more than 240% from the IPO price to 89,400 Won. The company runs a subscription-based messaging platform and plans to launch a platform that allows stars and fans to interact in virtual reality.

Currently, DearU operates a platform called “DearU Bubbles”, through which K-pop fans can interact with their favorite stars with messages, photos, and videos. The company says the platform boasts 236 artists and more than 800,000 subscribers.

Investment bankers expect more K-pop-related companies to go public in the coming months following the success of Hybe, the label behind BTS, led by music IP trading platform Music Cow, is reportedly gearing up for an IPO as soon as possible. year.

“The valuation is quite high, reflecting their future growth potential. It remains to be seen whether they can live up to the high expectations,” said Kim Joong-kon, head of equity markets at NH Securities.

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