Dear U Co., an information technology unit under South Korea’s entertainment giant SM Entertainment Co. operating messaging platform Bubble, envisions becoming a global leading metaverse platform operator riding on K-pop popularity as it is readying its initial public offering next month.

Dear U is preparing to float a total 3.3 million shares at a price band of 18,000 won to 24,000 won on Korea’s secondary Kosdaq market on Nov.10 on the back of the success of its subscription-based messaging platform Bubble. At the top end, the IPO would fetch up to 79.2 billion won ($67.3 million). Korea Investment & Securities is the sole book runner. Bookbuilding will take place on Oct.25-26, and retail subscription on Nov.1-2.

Founded in 2017, Dear U is owned 40 percent by SM Studios, a subsidiary under SM Entertainment that manages non-music business.

Its fan community platform Bubble provides a private chat room service through which fans can receive text and voice messages, photos and videos from artists they love. Fans can also purchase NFT-linked digital goods at the platform.

Bubble differentiates itself from conventional fandom-based platforms like Hybe’s Weverse that are focused on selling goods and exclusive video contents by allowing fans to build close personal relationships with artists.

Dear U is currently providing Bubble to 22 entertainment companies including SM Entertainment and plans to expand its client base to global sports stars and Hollywood actors, said the company’s vice president Lee Hak-hee.

The company has so far secured 1.2 million paid subscribers with zero marketing money by leveraging on the solid fandom of SM artists, which helped its top and bottom line. The company posted an operating profit of 6.6 billion won on sales of 18.4 billion won in the first half of this year, turning out a profit for the first time. Its operating margin amounted to 36 percent.

Dear U plans to use the IPO proceeds to build a metaverse service platform, eying to become the global leading metaverse platform operator, Lee said.

By Kang In-seon and Lee Soo-min

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]