READ - Wuxiaworld Merger-Acquisition

Hi everyone, it is time for the biggest announcement in Wuxiaworld’s history!  As has just been reported by the media in places like TechCrunch, Wuxiaworld has been acquired by Kakao Entertainment (KE) via its U.S. subsidiary, Radish Media.  This is something we have been working on for months, and I know it will raise an enormous amount of speculation, so I have prepared a list of topics and answers that I expect many of you would be the most concerned or interested in.

New Korean novels coming, old ones are returning!

As some of you know, since we first started working on licensing Korean novels, there have been a good number of novels that our Korean partners simply weren’t able to acquire for us, and as a result those novels were taken down.  When Kakao Entertainment makes a call, though, everyone picks up the phone!  Very soon, I expect we will be making announcements about the licensing and return of many of the old novels - and licenses for hotly anticipated new ones, including (hopefully) some that many of you have been requesting for a long time! We will be looking to hire many more new Korean translators - so if you think you have what it takes, hit us up at [email protected]!

Will you still be doing Chinese novels?

Absolutely! While we will be rapidly accelerating production of Korean webnovels, we will also be expanding Chinese webnovels translations. This was one of the first things I raised - I want the best novels for Wuxiaworld readers and in that sense, we want to be publisher-agnostic. We will be doing KE-affiliated Korean novels, other Korean novels, Chinese novels, and - hopefully by Q3 next year - looking to expand to Japanese webnovels and light novels as well.  KE has a strong presence in Japan thanks to their enormously successful Piccoma manga app, and we are in full alignment on making full use of those pre-existing relationships.

Is management changing?  

NO!  I (Ren Woxing) will remain CEO of the company, and all existing Wuxiaworld management/operations staff have been retained, with most given raises.  We are also going to be hiring a lot more people into our existing structure, so that we can keep pace with our anticipated ramp-up.  The biggest staff changes will be pretty much invisible to you guys - we will be gaining access to an army of KE/Radish developers and designers, and of course will now have a marketing arm to bring in new readers and stimulate new conversations.  But that’s pretty much it!

Will the business model change?

No, but also yes - That’s an entire conversation in and of itself, and early this year, well before we ever spoke to KE or Radish, I made comments regarding to potential upcoming changes in karma, which are primarily aimed at acquiring new users.  

We will get into that discussion in the coming days, but what I will guarantee is that we will ensure that we work to minimize the impact to existing free readers, and completely zero out any impact to existing paying supporters.  You guys helped make Wuxiaworld what it is, and I will ensure that you always have a home here.  One of the reasons why the karma changes have taken so long to roll out is the amount of work we had to put into coding in legacy systems et. al.  We have Radish’s full support in this, so just sit tight and wait for future announcements!

Ren, are you filthy rich now? Are you going to run away with the money?

None of your damn business!  😂 Okay, that’s mostly me just kidding.  I’ve known many of you for closing on seven years now, and will do my best to satisfy that curiosity without running afoul of contractual liability.  In short, while there was a cash component to this deal, a huge chunk of it was in the form of equity - that’s why I described it as a merger-acquisition.  I remain every bit as personally and financially invested in Wuxiaworld’s success as before the deal, and I ain’t going anywhere - which is exactly what Radish and KE wanted, and the contract I signed binds me to such as well.  And that’s all I can really say without the lawyers giving me the stink-eye!

Why did you choose to merge with Radish?

This is another discussion that would deserve an essay of its own, but I will endeavor to be brief (hah!).  First, we have to talk a bit of history and fundamentals.  Wuxiaworld has always been profitable, so money has never been the key concern.  For a company like ours, the “choke point” has always been in content - if we can’t acquire enough good content (ie licenses), we will eventually be in big trouble.  Years ago, when we first accepted investment from ChineseAll (17K, publisher of Martial God Asura, Nine Star Hegemon Body Art, and more), it was with the understanding that they would ensure a strong pipeline of future content for us. Unfortunately, while they were a good partner in many ways, this didn’t quite work out the way we had envisioned, and so in 2020 we elected to buy back their stake at a premium. This actually put us in debt for a period of time, but I was confident we would make that money back - and in 2021 we did, well ahead of schedule!

In 2021, as I looked at the scene, I realized that things had actually turned rather tricky.  There was (and still is) an enormous amount of investment money flooding into the scene from both China and Korea, and as a result the licensors were slowly becoming increasingly conservative.  Upfront fees were increasing, exclusive licenses were becoming non-exclusive, and licensors began to slow down the flow of licensing in general.  WW still had a huge advantage in terms of our built-in audience and reputation, and I felt confident that we would be very healthy for at least a good five more years, but judging by the speed of how the market was changing, I wasn’t sure how things would look after five years.

During this period of time, WW actually received many new investment inquiries or offers, including from some massive companies.  Like I said - there has been enormous amounts of industry money entering the English webnovel scene.  However, in many cases I had concerns about whether they would be able to provide the amount of content support that I felt Wuxiaworld would need.  In other cases, it quickly became clear that our mindsets were unaligned - one suitor even suggested mass MTL’ing thousands of novels, then picking out the popular ones for manual retranslation! I suppose that could be a viable business model, certainly, but this wasn’t what I got into this business to do. There were other cases where Wuxiaworld was clearly going to be completely absorbed into something else - another suitor told me upfront that I would be in charge of their international arm, rather than Wuxiaworld per se. So, we continued solo - until Radish reached out to us this summer.

KE and Radish were and are different.  We are strategically aligned and focused on producing quality content, with KE in particular already having invested nearly a billion dollars in the English-language market and in promoting their Korean content.  As a super-company, KE has guaranteed our product pipeline for many years to come, and Wuxiaworld itself focuses on male fantasy readers, while Radish has focused on female romance readers - this means there are no concerns of internal cross-competition or userbase cannibalization.  Radish remains their romance arm, while Wuxiaworld will become their male/fantasy arm. They’ve also guaranteed a massive marketing budget for Wuxiaworld, which will further reinforce our long-term viability and health - and they were determined to keep me onboard to the point of making it a contractual requirement.  In short, I truly believe this has been a win-win for everyone involved.

We have a lot of work ahead of us, but Wuxiaworld’s future has never been brighter.  And now, I shall get off the soapbox and open the floor to the inevitable flood of questions.  Cheers!

Ren