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THE INVESTOR
August 20, 2019
Big Reunion

Startups & Investors

What Samsung NEXT considers when investing in startups

  • PUBLISHED :July 23, 2019 - 15:48
  • UPDATED :July 24, 2019 - 11:04
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Samsung NEXT is one of the most active startup investors in Silicon Valley, looking for fledgling but promising startups. An opportunity to work with the investment firm, owned by tech giant Samsung Electronics, can grant startups a great reputation and recognition among other investors and startups around the world.

A lot of entrepreneurs may wonder how they can have such a partnership opportunity, and even seize the chance to exit after being acquired by Samsung. A director from the accelerator said scalability and feasibility are some of the keys.




“Samsung NEXT often invests in early-stage technology startups and tests the scalability of their businesses through a series of pilot programs,” said Yoon Hong-yul, director at Samsung NEXT Ventures Korea, a unit under Samsung NEXT, at the NEXT Rise startup conference on July 23 in Seoul.

“We also consider how to integrate startups’ technologies with Samsung’s exiting businesses and commercialize the actual services and products in global markets.”

Mobidoo, a startup that develops an ultrasonic wave solution for mobile payments or connection of electronic devices, is one such startup that has met the criteria of scalability and feasibility. Samsung NEXT invested in the Seoul-based startup in 2017.

The ultrasonic wave solution enables data transfer between home appliances and smartphones without the need of Wi-Fi or Bluetooth connectivity as it utilizes microphones and speakers installed in digital devices. The Mobidoo solution has been commercialized in Indonesia, Japan and the US.

“Investments from Samsung NEXT mean more than just financial benefits,” said Mobidoo CEO David Lee, at the conference.

“It means a startup’s technology has been recognized by one of the largest tech giants,” he added.

Giving some tips for other entrepreneurs who want to attract investments, he also said startups should try to beef up their global competitiveness and scale up their business in larger markets.

Samsung NEXT runs offices in global markets, including San Francisco, Seoul, New York City and Tel Aviv. It makes investments, from seed funding to series B, while running acceleration programs and taking over the startups it has invested in. The companies acquired by Samsung Electronics include LoopPay, a US firm that develops a core technology for mobile payment solution Samsung Pay, and SmartThings, an internet of things company.

Samsung-run startup investment unit said it is reviewing thousands of startups and has 90 portfolio companies, with some of which Samsung has been maintaining a partnership for more than a decade.

Kim Kang-hak, a former CEO of artificial intelligence-based chat bot startup Fluenty who now works under Samsung Electronics' mobile division, said startups that negotiate with larger companies for merger and acquisition deal need to set a timeline before closing it.

“Startups which lack financial backing are usually underdogs when negotiating with big companies,” Kim said.

“They should not waste too much time on negotiations since they cannot always reach a satisfactory outcome.”

His company was acquired by Samsung Electronics in 2017, and its chat bot solution is featured in the tech giant’s Galaxy smartphones.

By Kim Young-won (wone0102@heraldcorp.com)

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