One of Canada’s most prominent technology darlings is being sold to a South Korean internet conglomerate in a US$600-million deal.
Toronto-based online storytelling company Wattpad Corp. said that its board of directors unanimously approved a cash and stock transaction Tuesday that will see it acquired by Naver later this year. The company will retain its Canadian headquarters.
“Today’s news is about continuing Wattpad’s journey and taking our business to the next level,” said Allen Lau, one of Wattpad’s co-founders, in a statement.
“We’re thrilled about the prospect of joining the amazing teams at Naver and (its subsidiary) Webtoon to continue our growth, help more writers make money, and bring new voices to screens and bookstores everywhere.”
Lau and Ivan Yuen, who will continue to lead Wattpad after the sale, started the self-publishing platform after the pair dreamt up the idea on a napkin, while waiting for a flight at the Vancouver airport food court in 2006.
The platform quickly became home to stories from dozens of genres because it allows anyone to share their writing for free and is accessible on phones and tablets.
It became a household name around 2013 when Anna Todd, a Texas woman, started writing After, a fan fiction series on the platform about One Direction singer Harry Styles.
Her stories were eventually made into books and a film series, which encouraged Wattpad to start book publishing and studio entertainment divisions.
Naver, which bills itself as “South Korea’s largest web search engine,” was an ideal partner because it owns digital comics platform Webtoon.
Lau said the new owner will offer Wattpad a chance to grow beyond the 90 million people — including more than five million writers.
“Wattpad’s vision to entertain and connect the world through stories fits perfectly with our vision for Webtoon and Naver’s content brand and we’re thrilled to have them join the Naver family,” Seong-Sook Han, CEO of Naver in a statement.
The acquisition is expected to close in the second quarter of the company’s fiscal year and is subject to regulatory approvals.
It is the latest in a string of sales that have seen once-promising Canadian tech companies snatched up by foreign owners during the COVID-19 pandemic.
Element AI, a Montreal-based firm that creates artificial intelligence solutions for large organizations, signed a deal in November to be purchased by ServiceNow, a Santa Clara, Calif., company that offers a cloud-based workflow technology.
San Francisco-based “buy now, pay later” company Affirm reached a deal to buy Toronto rival PayBright for $340 million in early December.
This report by The Canadian Press was first published January 19, 2020.