Korea Exchange (KRX) has carried out its first startup acquisition in its 70-year history. It is seen as a move to accelerate enterprise-wide digital transformation (DX) based on artificial intelligence (AI) technology and secure future growth engines.

Korea Exchange said on Monday it has acquired AI-based data analytics startup FairLabs. The exchange invested 6.7 billion won to secure a 67 percent stake in FairLabs, becoming its largest shareholder.

The acquisition is the first merger and acquisition case in KRX's 70-year history since it was launched in 1956 as the Korea Stock Exchange.

It is significant in that the exchange, which has focused on stable operations based on its monopoly position, is seeking to improve its structure by directly acquiring an external technology company.

KRX Chairman Eun-bo Jeong (정은보) stressed that "this acquisition is the first step toward transforming into a commercialized profit-generating organization like leading global exchanges" and that it is "a strategic decision to secure KRX's future growth engines beyond a simple corporate acquisition."

The exchange selected FairLabs after reviewing about 30 promising companies in the AI and data fields over the past year.

It made the decision on the view that the synergy would be greatest when FairLabs' unstructured data analysis technology is combined with the exchange's vast market data.

Korea Exchange will use the acquisition as a starting point to embed AI technology across market operations.

It plans first to use FairLabs' technology to boost the competitiveness of its index and data business and speed up the development of new index products.

It will also progressively apply AI to market surveillance and management work.

Its goal is to analyse vast order-book and trade execution data in real time to detect signs of unfair trading early and dramatically improve work efficiency.

In the mid to long term, it plans to foster FairLabs as the exchange's core R&D organisation and a base for creating new revenue sources.

Jeong said KRX would continue to expand its scope through various means such as discovering new businesses and technology cooperation, leaving open the possibility of additional M&A.