UPDATED: Serialized fiction app Radish is being acquired by Kakao Entertainment, the entertainment arm of Korean internet giant Kakao, in a transaction valued at $440 million. In addition, Kakao Entertainment said it is buying Tapas Media, which says it has more than 3 million readers of its short-form online mobile content, for $510 million.
Word of the deals come as South Korea’s Naver on Monday announced the completion of its $600 million-plus takeover of Wattpad, a user-fiction story app.
“Tapas and Radish are two amazingly powerful storytelling platforms, and we welcome them into the Kakao Entertainment family with open arms as we rapidly ramp up our global operations,” Jinsoo Lee, CEO of Kakao Entertainment, said Tuesday in a statement Tuesday announcing the deals. “The partnership with Tapas and our webtoon IPs has already borne fruit and given us even more confidence in the North American marketplace. Radish gives us the platform to publish our web novels for the first time there, and we see endless potential.”
Radish’s board of directors and a majority of its shareholders have approved the acquisition, which is expected to close in June. According to Kako Entertainment, the addition of Radish will strengthen its web-toons and web-novel business and expand its reach in North America and other English-speaking territories.
Founded in 2016, Radish tapped into a vein of demand for serialized stories, spanning genres including romance, paranormal/sci-fi, LGBTQ+, young adult, horror, mystery and thriller. In 2018, the company began producing in-house original series alongside curated user-generated content — and Radish Originals now account for more than 90% of revenue, according to the company.
Radish’s model is different from that of Wattpad, which provides an open platform for users to contribute their own fiction or read other stories. Under Wattpad’s acquisition by Naver, it will remain based in Toronto, Canada, with co-founder/CEO Allen Lau reporting to Webtoon CEO Jun Koo Kim.
Tapas Media, meanwhile, produces original series through its Studio Tapas division, dedicated to producing and publishing original webcomics and novels. Tapas’ community side of the platform, Tapastry, provides a destination for any creator to share their stories. Founded in March 2012, Tapas has amassed more than 63,000 creator partners, 96,000 series and 1.6 million episodes. Tapas also has media partnerships including with Scholastic, Zoic Studios, Vault Comics, BOOM!, Hachette Book Group, Ten Speed Press (Penguin Random House), KakaoPage, Podium Audio, Frolic Media and Madison Wells.
Kakao plans to adapt the intellectual property from both Radish and Tapas for web-toons, video, and other formats. Currently, Kakao Entertainment produces original stories across a range of media including web-toons, music, TV series, movies and performances. It also has adapted popular web novels such as “What’s Wrong with Secretary Kim,” “A Business Proposal” and “Solo Leveling” into web-toons and other creative media.
Following Kakao’s Radish acquisition, Radish said, it will add new content to its platform from popular writers and well-known publishers as well as “explore” other content-acquisition opportunities following its sale.
Radish had raised about $72 million to date. Kakao Entertainment (previously called Kakao Page Corp.) co-led Radish’s Series A investment round with Softbank Ventures Asia. Radish’s original roster of seed-fund investors included UTA, Bertelsmann, Lowercase Capital, K50 Ventures, billionaire investor Nicolas Berggruen, former Microsoft executive Charlie Songhurst, BDA chairman Duncan Clark and author Amy Tan.
“Radish has firmly established itself as a leading web novel platform and yet we see even greater growth potential,” Jinsoo Lee, CEO of Kakao Entertainment, said in a statement. “With the combination of Kakao’s expertise in the IP business and Radish’s strong North American foothold, we are excited about what we can achieve together.”
After the acquisition, both Radish and Tapas will retain day-to-day management autonomy and continue to operate under their respective brands. Radish founder and CEO Seung-yoon Lee (pictured above) will continue to lead Radish and Tapas Media founder and CEO Chang Kim also will remain in that role. Both execs also will serve as global strategy officers of Kakao Entertainment.
“We will be utilizing Kakao Entertainment’s wide-ranging value chain to further exploit Radish’s original content,” Lee said in a statement.
In 2020, Radish’s revenue grew over 10 times the year prior, according to the privately held company. The app lets users read several episodes of a story for free; they can then make micropayments of 20-30 cents to access each additional episode. Alternatively, readers can wait an hour to unlock new episodes for free.
(Pictured above: Radish founder and CEO Seung-yoon Lee)