S.Korean game developer Smilegate, angel of local startups

Smilegate, South Korean developer of the world’s top first-person shooter game Crossfire, is raising investments in domestic startups despite the recent chilled investor sentiment on newly established companies amid higher interest rates and slower economic growth.

Smilegate has been nurturing local startups in various industries through its corporate venture capital unit, the largest among those of South Korean game developers.

Smilegate Investment Inc. was managing 1.22 trillion won ($901.7 million) in assets as of end-September, up from 1.18 trillion won last year as the company raised investments in startups, according to the game developer on Sunday. The venture capitalist has invested in 48 firms so far this year.

It spent 87.5% of its assets on early stage startups with histories of seven years or less, up from 70% in 2018.

Smilegate Investment spends about 100 billion won every year on investments in the game, bio, healthcare, artificial intelligence, robot and metaverse as well as materials, parts and equipment sectors.

“The spending is among the top 10 in the local venture capital sector,” said a company source.

JOB CREATION AT STARTUP SECTOR

Smilegate Group acquired MVP Venture Capital in 2011 and launched Smilegate Investment to support startups such as an ad-tech solution provider Moloco Inc., which is expected to list on the Nasdaq next year, and travel platform My Real Trip, which turned to the black in July.

“We took over MVP to create a social impact,” said another Smilegate official. “We aimed to help startups grow and create jobs through the initial investments of a venture capitalist.”

Startups invested by Smilegate Investment have actively increased staff.

The number of employees of Vuno Inc. surged to 243 from only eight in April 2016 when Smilegate Investment pumped up money into the medical imaging AI solution startup. My Real Trip ramped up its staff numbers to nearly 300 from only five in April 2014 when the venture capital unit made its first investment.

“Our investment helped them in their business expansion and to hire various talent,” said the other Smilegate official.

In addition, the group launched the Orange Planet Foundation to support next-generation entrepreneurs by providing space and money.

“Corporate values of startups supported by the foundation have totaled almost 3 trillion won, while they have created some 3,700 jobs,” said the official.

Write to Seung-Woo Lee at leeswoo@hankyung.com
 

Jongwoo Cheon edited this article.