Kakao Corporation will create a 300 billion won fund to assist its subcontractors and small businesses amid growing scrutiny by regulators and the public over the platform giant’s move to further expand its operations and infringe on the livelihood of mom-and-pop stores.
Kakao announced the so-called “coexistence plan” following a meeting of representatives of its major affiliates on Tuesday. Kakao, South Korea's largest mobile technology company, started out as a messenger app service provider and steadily expanded its operations into shopping, mobility, contents and finance.
Under the plan, Kcubeholdings owned by its founder Kim Beom-su and managed by his family members will transform itself into a social enterprise, focusing on funding social programs such as education and climate change.
Kakao Mobility, the affiliate most involved in Kakao’s business expansion schemes, also plans to shut down some of its operations in the service sector, such as flower, snack and salad delivery services.
The move follows public censure over the company's aggressive moves to diversify its businesses. The nation’s antitrust regulator also launched an investigation into Kakao and its founder Kim for allegedly violating the principle of separating industrial and financial capital.