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Venture Capital

Online portal Naver steps up Europe startup investment against US, China

Sep 01, 2020 (Gmt+09:00)

South Korea’s largest internet portal Naver Corp. has committed 110.4 billion won ($93 million) to two Europe-focused startup funds since late last year in a move to broaden its network in Europe to better compete with bigger rivals from the US and China.

In April, Naver committed 46 billion won to a Europe startup investment fund launched by Digital Sky Technologies, or DST Global. The Korean online giant is planning to commit an additional 74 billion won to the US venture capital firm.

In November 2019, Naver committed 64.4 billion won to KKR & Co.’s Europe startup fund.

“We aim to use the participation to broaden our network in Europe and explore new investments,” a Naver source told the Korean Investors.

Prior to the investments, the online search engine committed 200 million euros to the Europe startup fund , Korelya Capital, set up by Fleur Pellerin, the Korean-born French former minister of Small and Medium-sized Enterprises, Innovation and the Digital Economy. Through the fund, Naver has invested in a number of European startups, including an artificial intelligence company and a data analyzing startup.

Online portal Naver steps up Europe startup investment against US, China
Lee Hae-jin, Naver's founder and global investment officer, is behind the push for European expansion.

Back in 2016 when Naver’s Line Corp., Japan’s top messaging app, was listed on both the New York and Tokyo exchanges, Lee described Europe and the US as its “dream markets,” noting that he would look beyond Japan and Southeast Asia for global expansion.

The internet giant has used part of the proceeds from the IPO, worth around 1.5 trillion won, to acquire then-Xerox Research Center Europe in France, Europe’s biggest artificial intelligence research lab, in 2017.

On the other side of the Atlantic, Naver committed an unspecified amount of capital to a startup fund of the US venture capital firm Sequoia Capital in 2018.


Th online portal is still looking to increase its presence in Asia.

Last month, Naver agreed to combine the management of its Japanese unit Line Corp. with internet portal Yahoo Japan Corp, a unit of SoftBank. Under the agreement, the two entities will remain independent, but co-managed by a new holding company owned by a 50:50 joint venture between Naver and Yahoo Japan.

Naver is aiming to create Japan’s biggest internet platform with services ranging from chat, search and e-commerce to mobile payments.

Naver also launched a 1 trillion won joint fund with Mirae Asset Daewoo Co. Ltd., the Mirae Asset-Naver Asia Growth fund, in 2018 to invest in Asian startups.

“My hope is that Naver will be remembered as the company resisting to the end US and China imperialism controlling 99% of the global IT market,” Naver’s Lee said at a public event last year.

“We will preserve diversity in cooperation with Europe,” said Lee, adding that the name Korelya in Korelya Capital is a nod to the film Star Wars, wherein Corellia is the home planet of the Rebel Alliance.

On its home turf, Naver controls about 70% of South Korea’s online search market.

The country’s fair trade commission is scheduled to rule this month on whether Naver abused its market dominant position in a range of business areas, including retail, financial services and entertainment, into which it has been making inroads.

By Joo-wan Kim

Yeonhee Kim edited this article

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