Korean Investment Partners is the latest Korean venture capital firm to launch a Southeast Asian fund

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More South Korean investors are putting money into startups in Southeast Korea, creating an “investment corridor” between the two regions. The last one is KIPSEA. Short for Korean Investment Partners Southeast Asia, KIPSEA has a Singapore-based team and just announced its first fund close of $60 million. The limited partners come from South Korea, Hong Kong and Singapore and include Samsung Life Insurance, Korea Development Bank, Korea Growth Investment Corporation, Woomi Global, Mirana Ventures and Korea Investment & Securities.

KIPSEA head Synclare Kim tells TechCrunch that KIP is bullish on Southeast Asia because of how fast the market is growing. The sector-agnostic fund will focus on Series B startups, particularly those planning to expand in South Korea.

Kim says KIPSEA focuses on early-stage startups because it can add value, including consulting, ongoing follow-on investments and connections to its extensive investment network in Asia. Since its launch in 1986, KIP has invested in more than 900 companies and manages $3 billion in assets, including South Korean companies Kakao, Naver and YG Entertainment, Vietnamese e-commerce platform Tiki.vn and Indonesian health technology startup Halodoc.

The typical size of the new fund’s check will range from $2 million to $3 million. About 60% of the fund will be allocated for first investments and the rest will be for subsequent investments.

Kim says KIPSEA will work closely with the founders in its portfolio, such as monitoring the state of their management and, if needed, using its resources to support startups by providing them with strategic guidance and connections to collaborators. “These types of activities are essential to creating value for our portfolio companies,” he says.

KIP is a subsidiary of Korean Investment Holdings, a publicly listed financial conglomerate whose holdings include securities, asset management, banking, credit financing, private equity and real estate. This is not the first time Korean Investment Holdings has launched a fund focused on Southeast Asia. In 2018, he established the Singapore-based GEC-KIP Technology and Innovation Fund with Golden Equator Ventures. Kim says KIP wanted to find a partner for its first foray into Southeast Asia, but grew more confident over time, setting up an office in Singapore and eventually deciding to launch its own fund.

A small portion of KIPSEA’s fund will be reserved for South Korean companies planning to expand in Southeast Asia. One of the reasons Southeast Asia is an attractive market for Korean companies is its large population. When all its countries are counted together, Southeast Asia is the third most populous region in the world. Another reason is that the venture ecosystem there is developing rapidly and many global investors have shown interest in the region, giving financial markets more liquidity. “I think it will make it easier to liquidate and exit our investments for that reason in the future,” Kim says.

Kim notes that many Korean companies have also expanded into the region, and Korean venture capital in Southeast Asia is growing. “That means you have a better chance of finding a good company in the area,” he says. “If an investment firm is looking for a candidate who has a connection to the Korean market and the Southeast Asian market, many Korean venture capital investment firms have much more exposure in this area and have also devoted more resources to this area.”

Some examples of other Korean investors pursuing Southeast Asia include East Ventures and Seoul-based SV Investment announcing a $100 million fund dedicated to Southeast Asian startups. Woori Venture Partners recently opened an office in Singapore and has made several investments, while Shinhan Venture Investment has committed 50% of its $200 million flagship fund to the region.

For Southeast Asian companies looking to expand into Korea, Kim says it’s a realistic goal because the two markets have a more similar culture than the United States or Europe. Korea also has a wide variety of industry sectors, which gives Southeast Asian startups more expertise and experience that can help them expand and attract customers.

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