Korea Investment Partners is the latest Korean VC firm to launch a Southeast Asia fund
More South Korean investors are putting money into Southeast Korea startups, creating an “investment corridor” between the two regions. The latest one is KIPSEA. Short for Korea Investment Partners Southeast Asia, KIPSEA has a Singapore-based team and just announced its first fund close 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 head Synclare Kim tells TechCrunch that KIP is bullish on Southeast Asia because of how fast the market is growing. The sector-agnostic fund will focus on seed to Series B startups, especially ones that plan to expand into South Korea.
Kim says KIPSEA focuses on early-stage startups because it can add value, including consultancy, ongoing follow-up investments and connections to its wide 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, Vietnam’s e-commerce platform Tiki.vn and healthtech startup Halodoc from Indonesia.
The new fund’s typical check size will range from $2 million to $3 million. About 60% of the fund will be allocated to first investments, while the rest will be for follow-up investments.
Kim says KIPSEA will work closely with founders in its portfolio, like monitoring their management situation and, if there is a need, using its resources to support startups by providing them with strategic direction and connections with collaborators. “These kind of activities are essential to create value for our portfolio companies,” he says.
KIP is a subsidiary of Korea Investment Holdings, a publicly-listed financial conglomerate whose holdings include securities, asset management, banking, credit finance, private equity and real estate. This is not the first time Korea Investment Holdings has launched a Southeast Asia-focused fund. In 2018, it established the GEC-KIP Technology and Innovation Fund, based in Singapore, with Golden Equator Ventures. Kim says that KIP wanted to find a partner for its first foray into Southeast Asia, but over time it became more confident, setting up an office in Singapore and finally deciding to launch its own fund.
A small portion of KIPSEA’s fund will be reserved for South Korean companies that plan to expand into Southeast Asia. One of the reasons Southeast Asia is an attractive market for Korean companies is because of its large population. When all of its countries are counted together, Southeast Asia is the third most populous region in the world. Another reason is that the venture ecosystem there is rapidly developing, and many global investors have shown interest in the region, giving financial markets more liquidity. “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 Korean venture capital into Southeast Asia is growing. “That means you have more chances to find a good company in the area,” he says. “If an investment company is looking for a candidate who has a relationship in the Korean market and Southeast Asian market as well, many Korean VC investment companies have much more exposure in that area and have allocated more resources to that area, too.”
Some examples of other Korean investors pursuing Southeast Asia include the East Ventures and Seoul-based SV Investment’s announcement of a $100 million fund dedicated to Southeast Asian startups. Woori Venture Partners recently opened an office in Singapore and made several investments, while Shinhan Venture Investment has earmarked 50% of its $200 million flagship fund for the region.
For Southeast Asian companies that want to expand into Korea, Kim says that is a realistic goal because the two markets have more similar culture than compared to the United States or Europe. Korea also has a wide diversity of industry sectors, giving Southeast Asian startups exposure to more expertise and experience that can help them expand and attract customers.