It isn’t often that a company in Asia acquires a U.S. rival, particularly one that has surfed a wave of hype in Silicon Valley. But that’s exactly what happened this week after Path announced the sale of its flagship app to Korea’s Daum Kakao.
The deal is undisclosed, but, as an real acquisition involving two consumer messaging apps, it is notable, particularly as the mobile messaging space transitions from a period of hyper growth to one of consolidation and services. (I mentioned this briefly when I assessed WhatsApp’s global presence last month.)
Path And Kakao Talk
Most people interested in tech are familiar with Path. The five-year-old service burst onto the scene as a beautifully designed, mobile-first alternative to Facebook with a number of features to set it apart from the social network. Notably there was a 50 friend limit for each user (that’s since been lifted), and a refreshing design, one major element of which Facebook ironically began copying this week.
Ultimately, Path didn’t break out of Silicon Valley and go mainstream in the U.S., but it did make inroads in Asia — particularly in Indonesia. The company is said to have 23 million registered users, four million of whom are in the Southeast Asia country, as of October last year. Path began to focus more intently on Asia with its redesign in 2013, while it took money from Indonesia’s Bakrie Global Group as part of a $25 million Series C last year.
Daum Kakao is less known, particularly in the U.S.. The organization was formed when Korean internet firm Daum merged with domestic messaging app company Kakao in a $2.9 billion deal last year.
The company’s Kakao Talk app is perhaps the best example of how a messaging app has impacted media and internet distribution — which is where the trend is moving in the U.S. and other countries. Though it has a small global presence — its 160 million registered userbase is far lower than key rivals — the app is installed on over 95 percent of smartphones in its native Korea, where it offers free texts and calls, games, a payment service, taxi-hailing and more.
The 2015 Mary Meeker internet trends report, released this week, ranked Kakao Talk as the top messaging app worldwide based on user engagement. Another indicator of its stickiness is that its games business utterly dominates Korea’s iOS and Android app stores, according to data from App Annie.