Stonebridge Ventures to set up $168 mn new fund in H1

Stonebridge Ventures Inc., South Korea’s most profitable venture capital firm, plans to establish a fresh fund of $168 million, the largest in the company’s history, in the first half.

Stonebridge Ventures, spun off in 2017 from Stonebridge Capital, a South Korean private equity firm, is scheduled to list on the junior Kosdaq next month in order to raise up to 47.3 billion won ($39.7 million). Its market capitalization is expected to reach 189 billion won, the fifth-largest among listed venture capital firms in the country.

Stonebridge Ventures’ assets under management have been rapidly increasing. It had received 950 billion won in commitments but raised more than 1 trillion won from investors, sharply up from 700 billion won as of September 2021.

The venture capital firm is slated to set up a new fund of 200 billion won ($167.8 million) in the first half, its CEO Yu Sung-woon said. It established a blind pool fund of 163.6 billion won at the end of last year.

“We are one of the VCs with the fastest growth in AUM over the last four and five years,” Yu told The Korea Economic Daily on Monday. “It means our capabilities on both investment and exit are well recognized.”

Stonebridge Ventures reported the largest proceeds among domestic venture capital firms in the 2016-2020 period as it participated in high-profile investments including Krafton Inc., South Korea’s game developer of PlayerUnknown’s Battlegrounds (PUBG), SoCar, a car-sharing platform and Zigbang, a real estate app. The venture capital firm was also an initial investor in small caps such as Jeju Beer Co. that was listed last year.

Its six liquidated funds delivered an average of 2.5 times their investment to generate a total of 204.3 billion won in proceeds. Stonebridge Ventures is expected to log strong proceeds as some of the startups it invested such as SoCar aim to go public in the first half.

FOLLOW-ON INVESTMENT

Yu emphasized follow-on investment, saying the firm supports startups at each stage of growth. For example, Stonebridge Ventures has provided a total of 15 billion won to Jeju Beer in six stages. It made four investments in Lake Materials, a specialty chemical maker listed in 2020, and three investments in an artificial intelligence startup SUALAB that Nasdaq-listed Cognex Corp. acquired in 2019.

“We are managing 13 funds that are divided into growth phases – early, middle and late stages – regardless of sectors,” Yu said. “We will become a VC that can cover the entire life cycle of startups.”

Stonebridge Ventures focuses on how much market startups target can grow when the venture capital firm makes an investment decision, Yu said.

“Even if you have good technology, it is useless if the market is small. But if the market size is 20 trillion to 30 trillion won, you can create hundreds of billions of won only with a market share of 1%,” he said.

Yu paid attention to digital therapy startups, saying South Koreans of all ages are familiar with digital devices such as smartphones. Stonebridge Ventures bet on Emocog Corp., digital therapeutics for dementia startup, and S-Alpha Therapeutics Inc., a health apps and digital therapeutics developer. It is also interested in companies that detect the aging of industrial facilities based on AI, and deep-technology startups.

Write to Jong-woo Kim at jongwoo@hankyung.com
Jongwoo Cheon edited this article.