[비즈한국] Kakao Healthcare, the spearhead of the Kakao035720 Group’s healthcare business, is expressing confidence in improving its profitability. The company aims to reach a turnaround as early as the second half of 2027 by enhancing the competitiveness of its core services to boost popularity and accelerating its overseas expansion.
On the 22nd, CEO Hwang Hee attended a lecture held at the Jeongdong 1928 Art Center in Jung-gu, Seoul, hosted by the Korea Medical & Bio Journalists Association Media Academy, titled "Transition to Patient-Centered Healthcare in a Super-Aged Society: The Healthcare Paradigm Shift Driven by Platforms." After the lecture, CEO Hwang met with reporters and stated, "The current deficit is within our expected levels. This is a time when revenue growth is critical, and our task starting next year is to reduce the size of the deficit," adding, "Our goal is to reach a turnaround by the second half of 2027 or 2028."
Kakao Healthcare, launched on December 1, 2021, recorded 1.8 billion KRW in revenue and an operating loss of 8.5 billion KRW in 2022; 4.5 billion KRW in revenue and a 22 billion KRW loss in 2023; and 11.9 billion KRW in revenue and a 34.9 billion KRW loss in 2024. Although revenue has grown by more than 561% during this period, operating losses have also expanded by over 310%, making profitability improvement a key challenge.
Nevertheless, CEO Hwang is confident in both growth and profitability due to 'Pasta,' the mobile health management service that Kakao Healthcare has established as its core growth engine. Released in February 2024, Pasta is an app that allows users to check real-time blood glucose data by linking with Continuous Glucose Monitoring (CGM) sensors. The user base is steadily growing, and the service scope continues to expand. During his lecture, CEO Hwang said, "Pasta has around 1 million downloads, and including international users, our Monthly Active Users (MAU) is at the 500,000 level, showing high app retention," adding, "We have launched services for diabetes, pre-diabetes, obesity, and sleep management, and we will introduce a hypertension management service at the end of next month."
Kakao Healthcare is enhancing the competitiveness of the Pasta service by collaborating with companies such as Novo Nordisk, Sky Labs, and Asleep. It has advanced its diabetes and obesity management services by linking Pasta with Novo Nordisk’s smart insulin pen cap 'Mallya' and the 'NovoFit Care' support program for patients prescribed the obesity drug 'Wegovy.' The hypertension management service to be launched next month will integrate Sky Labs’ ring-type blood pressure monitor, 'Cart BP,' with Pasta. In July, the company partnered with Asleep to incorporate 'SleepTrack,' an AI-based sleep analysis technology, into Pasta. With SleepTrack, users can analyze their breathing sounds during sleep simply by keeping their smartphone nearby. There are expectations that this will enable more advanced chronic disease management by analyzing correlations with other health indicators recorded in Pasta, such as weight and blood glucose levels.
CEO Hwang expressed his determination to increase the service's popularity by lowering the price of Pasta. He remarked, "I think it would be great to have a lighter sensor that can broaden the indications while slightly reducing the range, but such a sensor is already available in the U.S.," adding, "It appears that such sensors will be available domestically by the second half of next year. If that happens, we will be able to lower the service price to under half, setting it at around 3,500 to 4,000 KRW per day." He added with anticipation, "I believe anyone interested in health would find it worth using."
Kakao Healthcare also plans to accelerate its expansion into overseas markets, including the U.S. and Japan. The company established its Japanese subsidiary, 'KHC Japan,' this past May, and in April 2023, it formed strategic partnerships with local companies such as Dexcom, Google Cloud, and Signature Healthcare to enter the U.S. market. CEO Hwang hinted, "There will be an opportunity to share more about our Japan business around next spring."
CEO Hwang drew a clear line regarding speculations that the company released health functional foods (nutraceuticals) to improve profitability. He stated that he intends to focus on the company's role as a platform provider. On the 13th, Kakao Healthcare partnered with the health food distributor HP&O to launch three children's health functional food products under the 'Denps Kids' brand. This raised concerns that if Kakao Healthcare, as a platform operator, moved beyond its original role as an intermediary creating an ecosystem and became a direct market participant, it could lead to a monopoly that undermines fair competition through practices like self-preferencing and creating barriers to entry.
CEO Hwang explained, "Denps needed consultations from pediatric specialists to enter the children's health food market. They asked me for advice, but as the company CEO, I decided it was inappropriate to do so in a personal capacity, so I signed a contract between the company and them, and providing advice on the raw materials for the products was all I did." He added, "Not only do I lack the capability to turn this into a health food company, but we also want to verify good products and see a variety of products consumed through our platform."