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Startups

Silicon Valley-based PnP sets sights on Korean smart city ventures

Jan 13, 2021 (Gmt+09:00)

Acting Seoul Mayor Seo Jung-hyup in video call with Saeed Amidi, founder and CEO of PnP (Courtesy of the Seoul Metropolitan Government)

Plug and Play (PnP), a Silicon Valley-based startup accelerator, will team up with the city of Seoul to invest in South Korean venture firms with smart city-related technologies, including mobility, Internet of things (IoT) and eco-friendly energy.

PnP is set to open its first office in Seoul in April to co-invest in Korean startups alongside the Seoul Metropolitan Government, the city government said on Jan. 12. The Seoul office will become the 38th overseas office of the US investment firm. 

Saeed Amidi, founder and CEO of the world’s largest early stage investor, officially announced the Seoul office launch during a video call with acting Seoul Mayor Seo Jung-hyup on the sidelines of CES 2021 on Tuesday. 

In January 2020, PnP signed a preliminary agreement to open a Seoul office and cooperate in investing in Korean startups with the Seoul Metropolitan Government.

“South Korea’s startup market was brought to our attention after its number of unicorn companies topped 10,” said Song Myung-soo, named co-head of PnP’s Seoul operations.

“We saw growing investment opportunities in Korea and decided to enter this market. … We are interested in discovering and nurturing startups with smart city-related technologies such as mobility, IoT and eco-friendly energy,” Kim said in a statement released by the Seoul city government.

A smart city focuses on effectively using data and digital technology for planning and management of a city to address problems such as traffic congestion, air pollution and waste increase, thus making it more efficient and innovative.

“Our goal is helping competitive domestic startups go abroad and introducing foreign startups into Korea, which will upgrade the Korean startup ecosystem," Song added.

Startup accelerators invest in early stage companies and support them with education and marketing programs. Since its inception in 2016, PnP has invested in 1,400 companies as of 2019, including PayPal, Google, Dropbox and Lending Club.

In 2019 alone, it invested in 250 companies and its annual investment averaged $30 million. 

RIPE TIME FOR SMART CITY INVESTMENT

On its website, PnP said that discussions around smart cities have been around for a decade, but believes now is the time to engage in smart city-relevant investment, given the technology development and expected positive returns.

The Seoul city government pledged to provide systematic support required for their co-investment.

“With Plug and Play’s advance into Seoul, we will provide every support to help it demonstrate its investment capability,” acting Mayor Seo said in the statement.

Over the past few years, PnP has formed strategic partnerships with Korean companies to finance both Korean and foreign startups. The Korean firms in its partnerships include KB Financial Group, Shinhan Financial Group, Samsung Fire & Marine Insurance Co., Korean Air Line Co., LG Corp., Hanwha Corp., CJ Corp and Nexen Tire Co.

Separately, the South Korean government plans to back 20 trillion won ($18 billion) worth of domestic venture capital funds by 2025 by injecting the governmet money of 3 trillion won into them. Those funds will be set up jointly with asset managers  to invest in contactless, digital and environmentally friendly businesses.

Write to Soo-Jung Ha at Agatha77@hankyung.com

Yeonhee Kim edited this article.

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