Hana to invest W30 bil. in AI asset platform operator

Hana to invest W30 bil. in AI asset platform operator

Hana Financial Investment headquarters in Seoul / Yonhap

By Lee Min-hyung

Hana Financial Investment plans to invest 30 billion won ($25.57 million) in Fount, a Seoul-based artificial intelligence (AI) asset management platform operator, seeking a technological partnership as well as high investment returns after the fintech firm’s planned initial public offering (IPO).

The securities arm of Hana Financial Group has formed an alliance with a group of other financial investors to inject a total of 40 billion won for a 20 percent stake in the startup, which has a market valuation estimated at around 200 billion won.

Hana declined to comment. Because Fount is the nation’s leading AI-powered asset manager, Hana Financial Investment hopes to use Fount’s channels to possibly improve its ability to focus on non-banking asset management portfolios.

Fount was established in 2015 with its robo-adviser service. The firm’s clients were those in the business-to-business sectors, such as banks or brokerage houses, but it has widened the customer base into retail investors since then. Its asset under management reaches 870 billion won, the largest among the nation’s robo-adviser services industry.

The company is winning investment from a number of other financial companies including Shinhan Card and Korea Development Bank as investors remain quite bullish over it further growth potential after its IPO. Fount is making preparations for a debut at tech-heavy Kosdaq as early as 2024 after recently picking Korea Investment & Securities as a lead manager to proceed with its planned IPO.

The investment is expected to help Hana Financial improve its profits after Fount’s stock debut, just like KB Kookmin Bank did so through its stake investment in KakaoBank which became the nation’s largest financial firm by market capitalization after its recent IPO. KB held a 9.35 percent stake in the internet-only bank before its market debut.

For now, the startup has yet to achieve turnaround after reporting a net loss of 4 billion won in 2020, but Fount’s real-time fund recommendation service is getting some favorable reviews from the market.

Industry sources said conventional financial firms would continue to expand partnerships with emerging fintech firms. “Financial firms will spare no efforts in making direct or indirect investment in fintech firms with technological expertise, as digitalization has become a must for any financial players after the pandemic outbreak,” an official from a financial industry said.

“More and more young people will pay attention to robo-adviser services due to their very accessible platforms and solid investment returns,” the source said. Fount has shown a growth trajectory since its launch of mobile application in June 2018. It took 17 months for the app to attract 100,000 downloads, but the figure surged to 1 million as of July 2021, according to the company.

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