D.CAMP eyes tech startups for global expansion

D.CAMP, South Korea's largest non-profit foundation for startups, is on the lookout for domestic tech startups with the potential to go big in global markets.

“Most domestic startups have business model patents, but they lack technology patents. We need to nurture startups that have promising technology and the ability to foray into overseas markets,” said Kim Hong-il, the head of D.CAMP, in an interview with The Korea Economic Daily on Dec. 22.

According to Kim, service provider startups often hit a wall when it comes to overseas expansion. D.CAMP plans to increase investment in tech and manufacturing startups backed with patents, technology and intellectual property rights.

Founded in 2013, D.CAMP fosters startups via direct and indirect investments. Around 17 domestic banks, including Woori Bank and Shinhan Bank, alongside the Korea Housing Finance Corp., have invested a total of 845 billion won ($762 million) into the foundation.

D.CAMP’s primary business model is indirect investment through funds. It operates around 743.2 billion won in assets under management. Recently Kim has focused on helping domestic startups gain a foothold in foreign markets.

Kim has managed D.CAMP over the past three years. He comes with years of experience in the financial sector, beginning his career at the Korea Development Bank in 1991. Since then, he has worked at various financial institutions, including ABN-AMRO Bank in Hong Kong, and Nomura Securities. He also served as the chief executive at the Postal Savings and Insurance Development Institute and as the executive vice president at IBK Asset Management. 

According to Kim, the foundation's philosophy is perseverance. Startups take about 10 years to get past the death valley curve, but domestic venture capital firms' investment and exit periods are relatively short, spanning around seven years.

Kim stressed the importance of extending the management period instead of focusing on the investment amount. On these grounds, D.CAMP set up a 39 billion won ($35 million) fund in October, which will be managed for up to 13 years with an eight-year initial investment period.

“Being an entrepreneur is extremely challenging and backbreaking work, with only about 10% finishing the race," Kim said, adding that he has met many entrepreneurs dealing with physical and mental maladies brought on by the responsibilities of starting a company.

“But their successes, attempts and failures all serve as a foundation for people out there,” Kim said. “Entrepreneurs, regardless of age, can be viewed as society's true leaders."

So far, D.CAMP has directly invested in around 120 startups, of which many are inching closer to a trading debut, such as Go Pizza Co., a startup that offers single-serving pizzas and has been selected as a "baby unicorn " – a rising company with a corporate value of less than 100 billion won – by the Ministry of SMEs and Startups.

Other promising startups in D.CAMP's portfolio include FitPet, providing healthcare solutions and diagnostics service for pets; Korea Credit Data, which developed accounting software CashNote with an enterprise value of 300 billion won; Finda, an online platform that offers a bundle of financial products; and 8 Percent, a peer-to-peer lending platform.

Every month, D.CAMP hosts a demo day where startups pitch to a large crowd, including representatives from VC firms. A company with a successful presentation can earn up to 300 million won ($275,000) in startup capital and a one-year residency at D.CAMP.

Starting next year, D.CAMP plans to host demo days at regional research labs and industrial complexes to further contribute to the tech startup ecosystem.


Write to Hae-sung Lee at ihs@hankyung.com
Danbee Lee edited this article.