This article was published on May 21, 2025, at 10:41 a.m. on the ChosunBiz RM Report site.
It was reported on the 21st that Colorverse, a metaverse development company affiliated with Kakao, has gone bankrupt. The term ‘metaverse’ combines ‘Meta,’ meaning transcendence, and ‘Universe,’ meaning universe, referring to a virtual world linked to reality.
The 12th Division of the Seoul Bankruptcy Court (presiding Judge Director General Choi Doo-ho) ruled for a simplified bankruptcy for Colorverse on the 19th. Established in August 2020, Colorverse is a metaverse development company that developed and operated the country’s first 3D virtual community, ‘Puppy Red.’ A simplified bankruptcy can be declared when a company has debts exceeding its assets and its remaining properties amount to below 500 million won.
According to industry sources, the reason for the bankruptcy filing is business deterioration due to financial difficulties. In the past, Colorverse was considered Kakao’s ‘forward base for metaverse projects.’ Between 2021 and 2022, it became a Kakao affiliate by attracting investments from Kakao affiliates Neptune and Kakao Games. As of the end of March, Neptune holds 44.3% and Kakao Games holds 10.71% of Colorverse’s equity. Colorverse was also responsible for developing the metaverse platform in Kakao’s metaverse vision, ‘Kakao Universe,’ which was introduced directly by former Kakao CEO Namgoong Hoon in June 2022.
However, the industry reports that Colorverse lost its momentum for business development after the departure of former CEO Namgoong Hoon. Although Colorverse launched the mobile version of the metaverse service, ‘Puppy Red M,’ in 2022, there were reports of initial user attrition due to server instability. Additionally, it was said that they faced difficulties after failing to secure additional investments for a K-pop related metaverse service.
Ultimately, Colorverse recorded a loss of approximately 11.5 billion won in 2022. Although it undertook large-scale restructuring, financial difficulties persisted. In December 2023, the Puppy Red M service was also terminated. At that time, Lee Yong-soo, the representative of Colorverse, stated through an announcement, 'We have come to a situation where we need to organize the company, leading to the termination of the Puppy Red service as well.'