South Korean AI short drama platform Korai Flix plans to list via SPAC at a $3.5 billion valuation

October 21 news: Korean AI short drama platform Korai Flix plans to list on the NYSE through a merger with US shell company APEX Tech Acquisition. Under the agreement reached by both parties, the transaction values Korai Flix's pre-merger equity at 3.5 billion US dollars, approximately 23.4 billion RMB.

Although Korai Flix claims to have 26 million registered users, this announcement did not disclose core financial data such as revenue and profit, and even who the founder is was not clearly introduced. More detailed information will have to wait for the subsequent S-4 registration filing submitted by the company to the SEC.

Whether 3.5 billion US dollars is really worth it is hard to say for now, but Korai Flix has indeed caught a good moment.

Over the past two years, AI video generation technology has iterated rapidly, and short dramas have also spread from China to overseas. Domestically, video generation tools such as Kling and Jimeng have kept launching new products, one after another; "The Laid-Off Girl" racked up hundreds of millions of views, and even "it's a bit expensive, but eating it doesn't burn the heart" became a viral meme across the internet. Overseas, platforms such as DramaBox, ReelShort and Korea's Vigloo are also accelerating their competition for the market.

According to a forecast by the DataEye Research Institute, the overseas micro-short drama market will exceed 6 billion US dollars in 2026, of which AI dramas and comic dramas are expected to account for nearly 70%. The market is getting hotter, and a platform that has been online for more than two years has therefore reached the doorstep of the capital market.

Korai Flix

Online for two years, valued at 23.4 billion

Korai Flix launched in June 2024 and focuses on AI short dramas, AI virtual companionship and video creation tools. Users can both binge-watch dramas on the platform and use AI to make videos and interact with virtual characters. As of June 30 this year, the company says it has about 26 million registered users in 15 countries and regions in Asia, including India, Indonesia, the Philippines and Japan.

After only more than two years online, Korai Flix plans to go public. According to the plan, it will merge with US shell company APEX Tech Acquisition, with the transaction expected to be completed in the first quarter of 2027, and the merged listed company will be renamed Krflix Group.

This transaction uses the SPAC model — "list first, then find a company." The shell company first raises funds through an IPO, then seeks to merge with an unlisted company, giving the other party listed status. For the target company, this path to listing may be faster; for the shell company's sponsors, after completing the merger, there is also an opportunity to profit by holding shares in the new company.

The background of this shell company is also quite interesting.

According to the SEC prospectus, APEX is wholly controlled by Chinese citizen Shaoren Liu. He served as chairman of a precision bearing manufacturing enterprise in Wafangdian, Dalian from March 2020 to July 2025, and is currently chairman and chief financial officer of APEX.

In July this year, APEX welcomed a new CEO, Florence Ng. She previously served as chief operating officer of US-listed company Mega Matrix, and this company happens to operate the overseas short drama platform FlexTV.

According to SEC filings, APEX listed in February this year and raised a total of about 112 million US dollars in its IPO. But Korai Flix's pre-transaction valuation is as high as 3.5 billion US dollars. Why is there such a big difference?

According to the agreement, Korai's original shareholders will receive shares in the merged company priced at 10 US dollars per share, with a total value of 3.5 billion US dollars, about 350 million shares. In other words, this is an equity valuation negotiated by both parties, not APEX spending 3.5 billion US dollars in cash to acquire it, nor Korai raising 3.5 billion US dollars.

The agreement also designs two classes of shares, A and B: Class A shares carry 1 vote per share, and Class B shares carry 20 votes per share, making it easier for high-voting-power shareholders to maintain control. At the same time, this transaction has no minimum cash condition. APEX's public shareholders can redeem their shares before the merger and get back the corresponding funds. The more people redeem, the less cash is left for the merged company. However, because the agreement does not set a minimum cash condition, even if the remaining cash shrinks significantly, that alone will not prevent the transaction from being completed.

Of course, listing still has thresholds. The agreement requires that in the most recent quarter before closing, the combined net assets of Korai's relevant operating companies be no less than 100 million US dollars, and the platform's registered users be no less than 20 million, with the user number to be verified by both parties. The transaction is expected to be completed in the first quarter of 2027 and still requires necessary approvals.

In 2024, video generation products such as Kling and Jimeng were launched one after another, and CCTV also released the AI micro-short drama "Chinese Mythology." At that time, what everyone cared about most was still whether AI could make characters and scenes realistic and whether the images could be coherent. Whether the plot was good was, by contrast, not so important.

By 2025, AI comic dramas were the first to take off.

Entering 2026, the popularity of AI short dramas rose another notch.

In March this year, the AI short film "Huo Qubing," produced by director Yang Hanhan, suddenly flooded screens. "3 people, 48 hours, 3,000 yuan cost, 80-episode short drama, 500 million views" — a string of astonishing numbers sparked heated discussion.

However, this "low-cost myth" of AI short dramas was soon questioned. Yang Hanhan subsequently publicly clarified that the works released at the time were only two versions, one of more than 4 minutes and one of 6 minutes; the 3,000 yuan was only computing power cost and did not include labor and other expenses; and the 500 million views had not been accurately verified.

Although these numbers were exaggerated and misreported, "Huo Qubing" still attracted widespread attention.

The story revolves around a small-town girl named Fang Taozi. She comes to the big city to pursue her dream of becoming a model, but because she is too outstanding, she is cropped out of a group photo by her peers. After that, she step by step breaks into the fashion circle she longs for. As of mid-August, the drama's cumulative views had exceeded 360 million.

What's more interesting is that Fang Taozi also has her own social media accounts and has even started taking on advertisements. This AI actor, who does not exist at all in reality, has gradually gained attention independent of the short drama. Audiences are starting to remember the character and even follow her like a real-life celebrity.

"It's a bit expensive, but eating it doesn't cause heartburn."

This line comes from a batch of AI animated dramas about restaurant businesses that have recently become popular on platforms such as Hongguo and Douyin. They all tell similar stories: the protagonist runs a steamed bun shop or a boxed meal stall, insists on using good ingredients, but loses business to competitors who compete on low prices. Only when the competitor fails due to ingredient problems do customers come back, sighing, "Eating it doesn't cause heartburn."

The same plot is copied over and over, yet netizens find it funnier the more they watch. While complaining about the formula, they edit clips and imitate it, and eventually turn "doesn't cause heartburn" into a viral meme across the internet.

From Fang Taozi to "doesn't cause heartburn," the popularity of short dramas is starting to extend beyond the main episodes into character accounts, internet memes, and fan-made derivative works.

Although there are more ways for content to spread, that does not mean every work can be seen by audiences.

According to statistics from the DataEye Research Institute, in the first half of 2026, 221,900 AI dramas and animated dramas were released on the Douyin side alone, of which only 1,055 surpassed 100 million views, accounting for 0.48%.

However, the traffic of top works is quite astonishing. The 3D animated drama "Exiled to the Frontier, the Criminal's Wife Cultivates the Land and Raises a God of War" alone added 2.127 billion views on the Douyin side in June.

With more than 220,000 works competing for audiences, only a minority truly break out. As domestic competition intensifies, AI short dramas are also accelerating their expansion overseas.

In fact, over the past few years, the overseas expansion of Chinese short dramas has cultivated a group of mature distribution platforms, including DramaBox, ReelShort, and NetShort. Now, AI dramas and animated dramas are also beginning to reach overseas audiences through these channels.

According to statistics from the DataEye Research Institute, in the first quarter of 2026, among the top 100 popular advertising materials for overseas short dramas, the share of AI dramas and animated dramas rose from 2% in January to 16% in March. The AI short drama platform VibeShort, launched in February this year, entered the top 20 of the overseas short drama app in-app purchase revenue rankings in just a few months.

However, the places with the largest download volumes in the overseas short drama market are not necessarily the most profitable places.

According to DataEye statistics, in the first half of this year, India, Indonesia, and Brazil ranked in the top three for overseas short drama app downloads, together contributing more than half of the downloads; but the three markets with the highest in-app purchase revenue were still the United States, Japan, and Canada, together accounting for more than 40%. However, these rankings cover the entire short drama industry, including live-action short dramas, and cannot directly represent the market distribution of AI short dramas.

Bubble or gold mine, who can make money?

First, different platforms have produced different types of hit works.

At present, Hongguo, Douyin, and Kuaishou are all important domestic distribution channels for AI short dramas. Tencent also launched the Huolong Animated Drama app this year, and WeChat launched the "Lvpaopao Short Drama" mini program.

However, popular content on various platforms has already shown clear differences.

According to the September 2026 rankings released by the DataEye Research Institute, all of the top 100 popular AI dramas and animated dramas on Hongguo are 3D animated dramas, while among the top 100 popular works on Douyin, 57 are AI simulated live-action dramas and 43 are 3D animated dramas.

Although the two rankings use different evaluation indicators, this difference is worth noting: for the same AI short drama, content that is popular on one platform may not achieve the same effect on another. Producers need to consider not only how to shoot the story, but also where the work is suitable for broadcast.

Second, Hongguo has begun to redistribute subsidies.

In September this year, Hongguo adjusted its incentive policy for high-quality AI dramas, canceling the additional incentive coefficient for series dramas. The new rules took effect in October. Sequels can still receive rewards, but no longer enjoy additional bonuses solely by virtue of being series dramas.

In October, Hongguo also announced the phased cancellation of the user coin reward function, no longer opening it to new users starting November 1, and planning to fully take it offline before the end of the year.

In the past, platforms needed to use rewards to attract more people to watch dramas and more people to make dramas. Now, some subsidies are beginning to be withdrawn, and the impact of how many viewers a work itself can attract on producers' income may further increase.

Third, works are increasingly easy to replicate, and the value of mature IP is beginning to emerge.

According to DataEye statistics, among the top 30 AI dramas and animated dramas by popularity on Hongguo in the first half of 2026, 19 were adapted from existing online novel IPs.

Popular stories can also continue to release sequels. According to DataEye statistics, in September, a total of 500 AI dramas and animated dramas had appeared on the Hongguo rankings, among which 15 works from seasons 23 to 37 of "Who Says You Can't Cultivate Immortality Without Spiritual Roots? The Path to Enlightenment Without Spiritual Proof" were on the list at the same time.

However, serialization can allow a story to continuously produce new content and accumulate traffic, but it does not guarantee that every sequel will become a hit. Hongguo's cancellation of additional rewards for series dramas also puts this model of relying on a large number of sequels to obtain extra revenue under adjustment.

Companies in the industry chain are also looking for their own ways to profit. Kling provides video generation tools, content companies develop IP, platforms such as Hongguo control distribution channels, and Korai Flix tries to combine AI short dramas with virtual companionship.

Korai's approach is also worth noting: if audiences are willing to continue interacting with virtual characters after watching a drama, the platform has an opportunity to extend user engagement time and explore sustained payments. However, there is not yet enough data to prove how much revenue 26 million registered users can actually create.

Conclusion

From being criticized as "rustic," to the point where even actors no longer need to be real people, the short drama business is changing so fast that the capital market is also starting to heat up.

Now, South Korea's Korai Flix plans to seek a U.S. stock listing at a valuation of $3.5 billion, and Chinese video generation companies such as Kling AI, Shengshu Technology, and Aishi Technology have also successively been reported to be heading to Hong Kong for listings.

The A-share market is equally lively. Decai Co., Ltd., which mainly does architectural decoration business, rode a "four days, three limit-ups" rally because of its connection to the AI animated drama concept. But the company subsequently announced that its controlled grandchild company Qixiang Wuxian, which is involved in related businesses, had revenue of 24.57 million yuan in the first half of the year and still lost 5.62 million yuan, with limited impact on the listed company's performance.

This article comes from the WeChat public account "Rongzhong Finance" (ID: thecapital), author: Li Bingzhi, published by 36Kr with authorization.