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

South Korean venture capital (VC) investment activity accelerated in 2019, thanks to the government’s efforts to boost the country’s VC industry.

According to the bell’s league tables of 71 domestic VC firms, South Korean VC investment – which excluded private equity activity by VC firms – totaled about 4.1 trillion won ($3.5 billion) in 2019. This represents a record high since data began to be complied by the bell in 2009 and an increase of more than 1.1 trillion won ($939 million), or 38 percent, from the previous year.

Top 20 firms led the way, deploying more than 2.56 trillion won ($2.18 billion) in VC deals during the year. The number also grew from 2.04 trillion won ($1.74 billion) in 2018.

The government’s efforts to boost the VC industry played a major role in driving the boom in VC investment in the country. In March of 2019, the Ministry of Economy and Finance and other relevant governmental departments jointly announced an initiative that aims to boost VC investment thereby helping domestic venture businesses grow into unicorns. This so-called “scale-up” strategy included plans to form a 12 trillion-won ($10.23 billion) fund of funds dedicated to the initiative over the next few years.

This led to an increase of larger VC funds over 100 billion won ($85.32 million), which resulted in growth in deal size as well as in investment in aggregate terms.

Korea Investment Partners retains top spot

Korea Investment Partners deployed 309.2 billion won ($263 million) in VC deals, again finding itself in the first place in 2019. The firm’s annual VC investment surpassed 300 billion won for the first time in the firm’s history.

Korea Investment Partners invested in more than 50 companies across a range of sectors, including healthcare, information and communication technologies (ICT). The VC firm was also active in sourcing deals abroad, investing in U.S.-based biotech company Inovio Pharmaceuticals and Vietnamese e-commerce platform Tiki Corporation.

KB Investment came to second, with 262 billion won ($223 million) of VC investment. The firm made more than 30 investments during the year, including the purchase of a 29 billion-won ($24.75 million) stake in Southeast Asian ride-hailing unicorn Grab.

Intervest rounded out the top three with 193 billion won ($164 million) of VC investment activity, including a 140 billion-won ($119 million) investment in local biotech startup DND Pharmatech in partnership with PayPal co-founder Peter Thiel. It has been five years that Intervest was included in the top three.

Other VC firms included in the top ten were SoftBank Ventures Korea (176.4 billion won, $150 million); Posco Capital (138.8 billion won, $118 million); Smilegate Investment (134 billion won, $114 million); Atinum Investment (124.7 billion won, $106 million); KTB Network (124.6 billion won, $106 million); IMM Investment (123.9 billion won, $105 million); Aju IB Investment (118.5 billion won, $101 million).

Eyes on the materials, parts and equipment sectors

The biotech and ICT sectors again led the way, accounting for nearly 53 percent of total VC investment in 2019. The biotech sector attracted 1.02 trillion won ($871 million), while the ICT sector received a total investment of 992.3 billion won ($847 million).

In particular, VC firms deployed about 1.6 trillion won ($1.36 billion) in Industry-4.0-related innovations such as bio-medical, Internet-of-Things (IoT) and artificial intelligence (AI).

Meanwhile, the retail and service sectors accounted for a little over 20 percent of total VC investment, and sectors related to culture and content constituted 8.7 percent.

The materials, parts and equipment sectors – which attracted 282 billion won ($241 million), or 7.4 percent of total volume in 2019 – are expected to see an increase in VC investment in 2020, as the government seeks to enhance the country’s competitiveness in these sectors. The Ministry of Economy and Finance announced last month that it plans to expand policy financing for businesses in these sectors, earmarking more than 750 billion won ($641 million) for the related projects.

(By reporter Kang Chul)