The South Korean government is strengthening policy financing through initiatives like the National Growth Fund and the Mother Fund to enhance the competitiveness of strategic industries such as artificial intelligence (AI), semiconductors, and biotechnology. This comes as a welcome relief for venture startups that have been struggling with funding shortages, as tens of trillions of won in policy funds are expected to flow into the market. The role of private venture capital firms, which select high-potential companies and support them over the long term, has become more crucial than ever.
Recently, we spoke with Kim Chang-kyu, CEO of Our Venture Partners, a leading player in the VC industry known for producing numerous unicorns, including Dalba Global, Viva Republica (Toss), and Woowa Brothers (Baedal Minjok).
Our Venture Partners' investment philosophy is centered on being an 'early partner.' Instead of making large-scale investments all at once, the firm gradually increases its investment in line with a company's growth, nurturing promising businesses into successful ones. Kim stated, "The role of venture capital is to discover good companies at the forefront during times of rapid industrial change. We must supply capital where it is needed to help promising companies grow into great ones." He noted that while the typical investment ratio for VC firms is around 5%, Our Venture Partners exceeds 15%, reflecting a commitment to share risks with investors.
Leading VC Firm Behind Unicorns Like Dalba and Toss
Dalba Global exemplifies Our Venture Partners' investment capabilities. The firm first invested in Dalba Global through the KTBN No. 13 and No. 16 venture investment funds in 2019, followed by three rounds of additional investments. Kim emphasized, "We expect to recover about 300 billion won from our investment in Dalba Global, marking another landmark deal for Our Venture Partners."
In 2024, the KTBN No. 7 venture investment fund, which invested in Woowa Brothers and Viva Republica, produced six unicorns. The fund achieved a liquidation return rate of 32% and an investment return rate of 478.4%. Established in May 2014 with 68.2 billion won, KTBN No. 7 was liquidated after ten years, generating approximately 250 billion won in profits.
Kim attributed the success of KTBN No. 7 to the timing of investments coinciding with a paradigm shift in foundational technologies toward mobile internet. He also highlighted the firm's ability to select standout companies like Woowa Brothers and Toss from numerous mobile platform firms.
Woowa Brothers is a prime example of a company that connected existing offline services with online platforms based on mobile internet. Kim explained, "While various business models utilizing mobile platforms emerged, the delivery service quickly penetrated consumer daily life, realizing its growth potential. The delivery business is significant not only at the national level but also has the potential to expand in densely populated urban areas, providing sufficient competitiveness if it dominates regional markets."
Toss transformed consumer financial services by offering convenient options that traditional financial institutions could not provide. Kim remarked, "Many fintech companies have emerged globally with innovative financial solutions, but Toss has demonstrated the most successful outcomes. International investors continue to invest in Toss, confident in the growth potential of the fintech industry."
“Next Unicorn Candidate is Lutton Technologies”
Kim identified Lutton Technologies as the next unicorn candidate. Our Venture Partners invested 2 billion won in Lutton's Series A funding round in 2023 and recently committed an additional 10 billion won in the Series B round. This reflects the firm's staged investment strategy, which increases investment as it observes the company's growth and business model evolution.
Kim praised Lutton for successfully expanding its business from AI productivity tools to a content platform, finding a viable revenue model. He explained that for AI application companies that utilize external models rather than developing their own large language models, establishing a stable revenue structure is crucial due to high usage costs.
Initially, Lutton focused on tools to enhance productivity and collaboration but faced challenges in finding a revenue model. However, it has rapidly increased users and revenue by expanding into the character chat content business. This service allows users to interact with a variety of AI characters they create. Kim noted that, similar to how Naver established a revenue base through Hangame before building its search advertising market, Lutton has secured a revenue model for its AI platform through its content services.
Kim described the character chat as akin to a content industry similar to gaming, where users create stories by conversing with characters on various topics, establishing a monetization model. He added, "Not only is traffic increasing, but average revenue per user is also rising rapidly, with monthly revenue reportedly exceeding 10 billion won."
Strengthening Global Investment Capabilities… Aiming to Become a Global Investment Leader in 10 Years
Kim assessed that the venture industry is positioned for further growth. As the pace of industrial change accelerates, venture capital must identify promising companies in the early stages of new industries and provide necessary funding.
He emphasized the role of venture capital, stating, "It is essential to discover good companies at the forefront during times of rapid industrial change and to supply capital where it is needed to help promising companies grow into great ones."
Our Venture Partners also plans to enhance its global investment capabilities. The firm is identifying promising domestic and international companies based on its offices in Shanghai, Singapore, and the United States. Kim expressed a desire to become a globally recognized investment leader representing South Korea in ten years.
* This article has been translated by AI.
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