K Cube Group, the Korean venture fund manager owned by messenger app group Daum Kakao, has entered the agri sector by buying a 33 percent stake in Korean agtech group Controlled Environment Agriculture Manna (Manna CEA).
No financial details were revealed. However, the deal marks a move by the owner of Talk, which has over 100 million users worldwide for its messenging apps, to diversify into other business segments. The company has struggled to crack foreign markets with messenging and has been looking for new ways to increase its profits.
“We decided to invest in the environmentally-friendly agricultural products market which is expected to grow 12 percent each year. Manna CEA’s technological expertise and profitable business model will produce synergies by teaming up with Kakao,” John Park, K Venture Group chief executive and formerly chief global and strategy officer for Daum Kakao, said in a statement.
The Korean group set up the K Venture arm at the start of the year with starting capital of 100 billion Korean won ($89 million, €80 million). Then in March, Daum Kakao bought Korean venture firm K Cube outright and gave its managers $15 million to invest – effectively increasing the group’s second $30m fund by 50 percent. The two investment groups have retained their independence from each other but are both ultimately owned by Daum Kakao.
Manna CEA was established in 2013 and develops technology to automate and manage indoor farming processes. It also provides maintenance services for its environmentally-friendly farming technology and sells organic produce, including salads, herbs and vegetables.
The company hopes to be able to benefit from Daum Kakao’s backing by using its messenging technology to communicate with its farmers and reach its customers.