More and more South Korean investors are pouring money into startups in Southeast Korea, creating an “investment corridor” between the two regions. The last one is KIPSEA. short for Korean investment partners In Southeast Asia, KIPSEA has a team based in Singapore and just announced the closing of its first fund of $60 million. Limited partners come from South Korea, Hong Kong and Singapore, and include Samsung Life Insurance, Korea Development Bank, Korea Growth Investment Corporation, Woomi Global, Mirana Ventures and Korea Investment & Securities.
KIPSEA Director Synclare Kim tells TechCrunch that KIP is bullish on Southeast Asia because of how quickly the market is growing. The sector-agnostic fund will focus on seeding Series B startups, especially those planning to expand into South Korea.
Kim says KIPSEA focuses on early-stage startups because it can add value, including consulting, ongoing follow-on investments, and connections to its extensive investment network in Asia. Since its launch in 1986, KIP has invested in more than 900 companies and has $3 billion in assets under management, including South Korean companies Kakao, Naver and YG Entertainment, Vietnamese e-commerce platform Tiki.vn and startup Halodoc healthcare technology from Indonesia.
The typical size of checks from the new fund will be between $2 million and $3 million. Around 60% of the fund will be allocated to first investments, while the rest will be allocated to subsequent investments.
Kim says KIPSEA will work closely with its portfolio founders, such as monitoring their management situation and, if necessary, using its resources to support startups by providing strategic direction and connections to collaborators. “These types of activities are essential to creating value for our portfolio companies,” she says.
KIP is a subsidiary of Korean Investment Holdings, a publicly traded financial conglomerate whose holdings include securities, asset management, banking, credit financing, private equity and real estate. This is not the first time Korean Investment Holdings has launched a Southeast Asia-focused fund. In 2018, it created the Singapore-based GEC-KIP Innovation and technology Fund with Golden Equator Ventures. Kim says KIP wanted to find a partner for its first foray into Southeast Asia, but over time it became more confident, set up an office in Singapore and eventually decided to launch its own fund.
A small portion of KIPSEA’s fund will be reserved for South Korean companies planning to expand to Southeast Asia. One of the reasons why Southeast Asia is an attractive market for Korean companies is its large population. When all its countries are counted together, Southeast Asia is the third most populous region in the world. Another reason is that the venture ecosystem is developing rapidly and many global investors have shown interest in the region, giving more liquidity to financial markets. “I think it will make it easier to liquidate and exit our investments for this reason in the future,” Kim says.
Kim notes that many Korean companies have also expanded into the region and that Korean venture capital in Southeast Asia is growing. “That means you have a better chance of finding a good company in the area,” he says. “If an investment firm is looking for a candidate who has a relationship in the Korean market and also the Southeast Asian market, many Korean venture capital investment firms have much more exposure in that area and have also allocated more resources to that area. area”.
Examples of other Korean investors looking to Southeast Asia include East Ventures and Seoul-based SV Investment. announcement of a 100 million dollar fund Dedicated to startups from Southeast Asia. Woori Venture Partners Recently opened an office in Singapore and made several investments, while Shinhan Venture Investment has allocated 50% of its emblematic fund of 200 million dollars for the region.
For Southeast Asian companies looking to expand into Korea, Kim says it’s a realistic goal because the two markets are more culturally similar than the United States or Europe. Korea also has a wide diversity of industry sectors, giving Southeast Asian startups exposure to more knowledge and experience that can help them expand and attract customers.
