[THE INVESTOR] Many Korean startups with great potential are often undervalued in the global market not because of their lack of technology or management skills but because of one missing qualification -- self-confidence, says Cindy Jin, principal at SoftBank Ventures Korea, the VC arm of the Japanese tech giant.
“Korean CEOs tend to be humble about their achievements and the company. Humble is good, but it is also important to boast what you’ve got to gain more investments and opportunities in this highly competitive market,” Jin told The Investor in an interview on Dec. 12 on the sidelines of the Innovation Day conference in Seoul, titled “Korea’s VCs and Startups and Opportunities in Emerging Markets,” hosted by the International Finance Corporation of World Bank Group.
“If you want to expand further, stay confident,” she added, saying the Korean market is large and exciting enough for more unicorns to emerge.
The Seoul-based SoftBank Ventures Korea has been active in funding early-stage tech startups since its initiation in 2000, back when startup was not even a buzzword here. Jin joined the firm in 2014.
So far, it has invested in around 200 startups, including successful ones such as game firms like Nexon, SundayToz -- developer of Anipang -- and Devsisters, as well as entertainment management agency KeyEast and online shopping mall Wizwid.
For Korean startups and venture firms to further expand globally, she said, they need to turn their eyes to the burgeoning Southeast Asian market.
“We have been looking at the Southeast Asian market for about seven years,” said Jin. “The market as a single region is very attractive and growing fast. There is an inflow of money and human capital even though you need to enter different markets with different strategies.”
The firm itself has expanded its successful investment portfolio in the region -- Tokopedia, one of Indonesia’s largest e-commerce platforms; RedMart, Singaporean online food store; and Shopback, Singaporean cashback platform, among others.
“We have been funding Tokopedia for about five years from its very early stage, with four more follow-up investments. When we invest in a startup, we give full commitment and continuous support,” she added.
Citing SoftBank Ventures’ unique “Time machine strategy,” she also said the firm has keen interest in bringing Korean companies to Southeast Asia where local firms are willing to share their know-how and learn from their exciting success stories.
“SoftBank Ventures is committed to the region and will continually hunt for strong ventures, which is also proven through our track record of good deals,” she said, adding carrying the prestigious SoftBank brand helped the VC to expand investment activities and attract promising startups, which is a good bet for their potential partners.
The VC is also eying the US and Israeli startups. As part of the efforts, it set up a fund focused on artificial intelligence and media with Korea’s largest portal operator Naver last year. The SB Next Media Innovation Fund, with a size of 97.3 billion won (US$89.51 million), has recently invested in US-based AI startup ObEN which builds virtual identity technology for consumers.
Jin introduced four things they look at when picking up quality startups to invest.
First, it wants to see a sizable market opportunity. If the market is too small or the growth is slow, it doesn’t matter how great the product is. Second, the startup has to provide meaningful services that people use. The services have to drive innovation of the market with its technology. Third, even at the early stage, the firm has to have an exit strategy, which can range from acquisition, M&A to IPO. Lastly, most important is its team members.
“The founder and CEO has to attract funds from great VCs and also top talent,” said Jin. “The CEO should not be afraid to work with smarter and more talented employees if the firm wants to grow. It’s about the charm. The CEO has to be attractive enough to have people work on their team and to gain investors’ trust for funds.”
By Lee Ji-yoon and Ahn Sung-mi