An increasing number of South Korean investors are directing their capital toward startups in Southeast Korea, fostering an “investment corridor” between the two regions. The most recent entrant to this trend is KIPSEA, an abbreviation for Korea Investment Partners Southeast Asia. KIPSEA, with its team based in Singapore, has recently announced the successful closure of its first fund, securing $60 million in commitments from limited partners hailing from South Korea, Hong Kong, and Singapore. Prominent investors in this fund include Samsung Life Insurance, Korea Development Bank, Korea Growth Investment Corporation, Woomi Global, Mirana Ventures, and Korea Investment & Securities.
According to Synclare Kim, the head of KIPSEA, the firm is enthusiastic about Southeast Asia due to the region’s rapid market growth. This sector-agnostic fund will primarily target early-stage startups, ranging from seed to Series B, particularly those with plans to expand into South Korea.
Kim emphasizes that KIPSEA’s focus on early-stage startups is driven by the value it can provide, including consultation, ongoing follow-up investments, and connections to its extensive investment network across Asia. Since its inception in 1986, KIP has invested in over 900 companies and manages assets totaling $3 billion, including South Korean firms like Kakao, Naver, and YG Entertainment, Vietnam’s e-commerce platform Tiki.vn, and Indonesia’s health tech startup Halodoc.
The typical investment size from the new fund will range from $2 million to $3 million. Approximately 60% of the fund’s resources will be allocated for initial investments, with the remainder earmarked for follow-up investments.
Kim emphasizes that KIPSEA will work closely with portfolio founders, offering support in monitoring their management situations and, when necessary, leveraging resources to provide startups with strategic guidance and access to potential collaborators. These activities are essential for enhancing the value of their portfolio companies.
KIP is a subsidiary of Korea Investment Holdings, a publicly listed financial conglomerate with interests in securities, asset management, banking, credit finance, private equity, and real estate. Notably, this is not the first time Korea Investment Holdings has launched a fund dedicated to Southeast Asia. In 2018, it established the GEC-KIP Technology and Innovation Fund, based in Singapore, in collaboration with Golden Equator Ventures. Over time, KIP gained more confidence and decided to set up its own fund, establishing an office in Singapore.
A portion of KIPSEA’s fund will be reserved for South Korean companies looking to expand into Southeast Asia. This is driven by the region’s large population, as when all its countries are considered collectively, Southeast Asia ranks as the third most populous region in the world. Additionally, the region’s rapidly developing venture ecosystem and the growing interest of global investors have increased financial market liquidity, making future investment liquidation and exits more accessible.
Kim notes that many Korean companies have expanded into Southeast Asia, and Korean venture capital interest in the region is on the rise. This provides more opportunities to discover promising companies in the area. For investment companies seeking a candidate with connections in both the Korean and Southeast Asian markets, Korean VC investment firms have increased their exposure and resource allocation in the region.
Several examples of other Korean investors targeting Southeast Asia include East Ventures and Seoul-based SV Investment, who jointly announced a $100 million fund dedicated to Southeast Asian startups. Woori Venture Partners recently opened an office in Singapore and made multiple investments, while Shinhan Venture Investment has allocated 50% of its $200 million flagship fund to the region.
Regarding Southeast Asian companies looking to expand into Korea, Kim suggests that this is a realistic goal due to the cultural similarities between the two markets compared to the United States or Europe. Korea offers a diverse range of industry sectors, providing Southeast Asian startups with exposure to expertise and experience that can facilitate expansion and customer acquisition.
