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Venture capital

KB Investment bulks up VC funds as parent group drives SE Asia expansion

Sep 21, 2020 (Gmt+09:00)

KB Investment Co., the venture capital arm of South Korea’s KB Financial Group, is raising 100 billion won ($86 million) in a fund to invest in Indian startups, shortly after it deployed about 50 billion won in eight Indian startups. The fundraising comes as its banking and brokerage affiliates make their foray into the Southeast Asian market, including Indonesia.

The new investment vehicle is a follow-up to the 220 billion won VC fund, dubbed the KB Growth Platform fund, which the KB Financial unit launched in May 2019 to invest in Asia, according to VC industry sources on Sept. 21.

The KB Growth Platform fund has deployed 130 billion won, or 60% of its fund, to startups in Southeast Asia, including 50 billion won in India. It has also invested in Singapore’s popular ride-sharing service operator Grab.

Simultaneously, KB Investment plans to more than treble the size of the $30 million Centauri Fund, jointly launched by PT Telkom Indonesia, a state-owned telecommunications conglomerate, to $100 million.

The KB Growth Platform participated in the Centauri Fund through its fund of funds. The Centauri Fund has invested in fintech and big data companies, including France-based travel insurance firm Koala.

These VC funds will target companies providing software as a service (SaaS) and non-contact mobile services -- sectors expected to see rapid growth even after the COVID-19 impact subsides. They will also provide follow-on funding to the startups in which they have already invested.

As the prolonged pandemic puts a dent in venture capital investment in emerging markets, KB Investment believes now is the time to hunt for bargains and expand its presence in other Asian markets, said a company source.

“Though it was our first investment in India and Southeast Asia, we were able to uncover several profitable investments, along with local and global investment firms,” the KB source told The Korean Investors, referring to the KB Growth Platform fund. “Through this new fund, we are expecting to boost our global investment returns and capabilities.”

Meanwhile, its brokerage affiliate KB Investment & Securities Co. will form a business alliance with New York-based Jefferies Group in December to issue KB’s equity research notes on a co-branded basis to the US financial services firm’s global clients.

“We will expand the partnership starting from equity research into investment banking,” said a KB Investment’s senior official. “We are also considering advancing into Vietnam together.”

Jefferies is ending its seven-year business alliance with Mirae Asset Daewoo Co. The US financial group has distributed Mirae’s equity research reports on Vietnamese companies to its clients, with Mirae Vietnam providing local equity brokerage services to Jefferies.

Separately, Kookmin Bank has increased its stake in Bank Bukopin, a medium-sized Indonesian lender, to 67% to boost its presence in the Southeast Asian market.

KB Financial Chairman Yoon Jong-kyu is widely expected to begin his third three-year term later this year. He took office as the group chairman in November 2014.

By Jung-hwan Hwng and Jae-won Park

(Photo: Getty Images Bank)

Yeonhee Kim edited this article

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