이 기사는 2020년 01월 07일 08:00 thebell 에 표출된 기사입니다.

Despite growing concerns about rising valuations, South Korean venture capital (VC) activity reached a new high in 2019. Investment by venture capital first surpassed the six trillion won ($5.15 billion) mark in aggregate terms. Fundraising activity also accelerated, increasing above six trillion won.

Fundraising activity

According to data from the bell’s league tables, total 59 domestic VC firms raised 6.71 trillion won ($5.75 billion) in 2019, representing a 1.15 trillion won ($1 billion) increase from the previous year when 49 VC managers raised 5.56 trillion won. Fundraising by VC firms in the country has witnessed a steady growth over the recent few years, surpassing four trillion won and five trillion marks in 2016 and 2018 respectively.

IMM Investment topped rankings for fundraising in 2019, raising more than 900 billion won ($779 million) for its VC and private equity (PE) funds. During the year, IMM Investment was more active in PE fundraising activity than VC, launching several PE funds that are project-specific. Among IMM’s largest PE funds closed in 2019 were KTCU Global Partnership PEF (580.2 billion won, $497 million) and IMM Infra 8 PEF (151.5 billion won, $129 million). Meanwhile, the firm closed only one VC fund, 2019 IMM Style Venture Fund, securing 10.5 billion won ($8.9 million).

KB Investment came to a distant second behind IMM Investment. But, based on VC funds alone, it raised the largest amount of money in 2019, securing 368 billion ($314 million) in aggregate for its VC funds and 9.6 billion ($8.2 million) for its PE funds, respectively.

Q Capital Partners held the third position by a narrow margin. The firm closed two PE funds, securing total commitments of 377.5 billion won ($323 million). Other VC managers in the top ten included SoftBank Ventures Korea and Premier Partners, both of which successfully closed a large fund with more than 300 billion won of commitments.

Meanwhile, Korea Investment Partners dominated offshore funding activity. Three VC funds closed by the firm in 2019 were all offshore funds, with 205.7 billion won ($176 million) of total commitments.

Investment activity

Loaded up with plenty of dry powder, domestic VC firms actively invested throughout the year. In particular, IMM Investment invested 1.11 trillion won ($950 million) through PE funds and 123.9 billion won ($106 million) through VC funds. The largest deal made by IMM in 2019 was the purchase of a 361.6 billion won ($308 million) stake in Vietnam’s largest conglomerate Vingroup. Other deals made by IMM included the acquisition of a 35 percent stake in the U.S. Texas Express Pipeline and the investment in South Korean e-commerce platform WeMakePrice.

IMM was followed by SoftBank Ventures Korea, the number two in investment activity in 2019. SoftBank Ventures deployed 176.4 billion won ($150 million) and 146 billion won ($124 million) in VC and PE deals, respectively.

Meanwhile, Korea Investment Partners and KB Investment, in third and fourth place respectively, were especially active in VC investment during the year. Korea Investment Partners deployed nearly 98 percent of its investment in VC deals worth 309.2 billion won ($264 million), securing the top position in VC investment (excluding PE activity) for the eighth consecutive year. KB Investment also invested 262 billion won ($224 million), which represents 93 percent of its total investment, in venture businesses including Southeast Asian ride-hailing unicorn Grab.

By sector, healthcare and biotech led the way, accounting for more than 25 percent of total investment by domestic VC firms in 2019. That was followed by the information and communication technologies (ICT) sector.

Exit activity

The venture-backed exit market also retained its momentum in 2019, with some exits in the biotech and ICT sectors hitting the jackpot.

Korea Investment Partners exited from its investment in EuBiologics, generating 84 percent of an internal rate of return (IRR). KTB Network recorded more than fifteen-fold gains from its exit from biotech startup Cellid. The stock market debut of Olipass, another healthcare company owned by KTB Network, also made more than three-fold gains.

One of the notable acquisitions in 2019 was machine vision company Cognex Corporation’s acquisition of Stonebridge Ventures-backed software startup SUALAB. Stonebridge Ventures invested in the startup through its three funds over the investment period. Thanks to this transaction, one of those three funds recorded nearly nine-fold gains, with 111 percent of an IRR.

Among VC funds that that liquidated in 2019, E&Investment’s 111 billion-won ($9.4 million) venture fund that invested solely in local healthcare startup HLB Life Science recorded the highest return, with 116.5 percent of an IRR.

(By reporter Ahn Kyung-ju)