KB Financial's $186 mn VC fund invests $42 mn in Indian startups

KB Financial Group's global venture capital fund, which raised 220 billion won ($185.6 million) last year, has wrapped up its investment of about 50 billion won ($42 million) allocated for Indian deals, in eight startups in the country, according to the VC investment industry on Sept. 10.

All of the investments in India were made jointly with global VCs such as Sequoia Capital, Accel Partners, Bessemer Venture Partners, GGV Capital, Tiger Global Management, and SAIF.

The KB Growth Platform fund was launched to invest in startups in India and Southeast Asia late last year. It had allocated 60% of the fund worth 130 billion for overseas investments, of which India made up 50 billion won. The remaining would be invested in South Korean companies in accordance with Korean regulations.

It is managed by KB Investment Co. Ltd., the VC arm of KB Financial Group.

Its portfolio in India is diversified across various sectors, including healthcare, fintech, edtech, retail, and logistics. The investment targets are seen as upcoming unicorns -- startups with an enterprise value of over $1 billion.

The eight Indian startups are education platform Vedantu, pharmacy app PharmEasy, online gold lending platform Rupeek, used car platform Spinny, truck cargo service Rivigo, travel platform TravelTriangle, and database service Tracxn.

Most recently KB Investment completed a $3.75 million investment into FarEye, an Indian logistics software company, as a final investment in India.

Three out of the eight startups secured additional investments from large institutional investors and saw surges in valuation. KB Investment credits the firm’s swift decision-making process and its rich network of leading global VC firms for the completion of Indian investment in a short period of time.

“The entire process starting from deal sourcing to actual investment took just a month or so for each company,” said a source from KB Investment. “These companies would have been less attractive in terms of valuation if we were even half a year late since we’d have to invest in the next series,” the source added.

“We put a lot of effort into networking to solidify our position as a trustworthy partner. And that led to joint investments with global VCs,” said the source from KB Investment. “Instead of partnering with a single firm, we spread out and worked with a different partner for each investment,” the source added.

India is home to 21 unicorns and raised $14.5 billion in VC investments in 2019. It is also the third-largest VC investment market following China and the US.

In addition to the investment of about 50 billion won in Indian startups, the KB VC fund has deployed tens of billions of won into Singapore-based Grab, a popular ride-sharing service in Southeast Asia. While the total amount of overseas investments remain under wraps, industry sources estimate the fund to have already used up more than half of its capital.

India has seen an increased inflow of global funds due to the trade war between the US and China. Earlier in July, Google announced that it would invest $10 billion in India over the next five years to foster the country’s adoption of digital technologies.

Sequoia Capital set up an India-focused fund worth $1.35 billion in June. Platform giants Facebook and Google, and US-based investment firm KKR & Co. have committed a combined $20 billion in stake investments into India’s largest telecommunication carrier Jio Platforms Limited.

Write to Jung-hwan Hwang at jung@hankyung.com