Korea FoF manager widens offshore VC pool into UAE, Vietnam

The Korea Venture Investment Corp. (KVIC), a quasi-government agency established to support South Korean startups and venture capital industry, has diversified its US- and China-focused portfolio into the United Arab Emirates (UAE) and Vietnam.

For its latest mandates of a combined 70 billion won ($62 million), it added one venture capital firm each from the UAE and Vietnam to the pool of 10 VC firms, according to the KVIC on June 7. Others include five US-based VC funds, one from China and two from Singapore.

It is the first time for the KVIC to provide funding to VC firms from the UAE and Vietnam since its inception in 2000. A total of 27 offshore VC firms had competed for the mandates.

The 10 selected VC firms will receive a combined 70 billion won in commitments from the KVIC. Including the KVIC's commitments, they are planning to raise around 900 billion won in aggregate, more than 10 times the money they are taking from the Korean fund of funds manager.

They are required to invest more than the amount they are receiving from the KVIC in South Korean companies. The FoF operator is the South Korean version of the Yozma Fund created in conjunction with the Israeli government.

"This mandate is meaningful in that we are expanding our global footprint and help South Korean startups' overseas expansion," said a KVIC official. 

The five US firms are White Star Capital, Storm Ventures, GFT Ventures, Bam Ventures and Strong Ventures. They will be granted a combined 27.5 billion won by the KVIC to raise at least 541.2 billion won in aggregate. 

China-based Nothern Light Venture Capital was awarded 11 billion won. It will use the proceeds to set up a 55 billion won vehicle.

For Southeast Asia, Vietnam-based Do Ventures and two Singapore-based VC firms -- Vertex Venture Management and Cento Ventures -- will be provided with a combined 28.6 billion won to finance their new vehicles of a total of 253 billion won.

The UAE-based Shoorooq VC Partners is receiving 1.65 billion from the KVIC to launch a 50.4 billion fund.

The KVIC has been running global FoFs since 2013. Excluding the latest 70 billion won commitments, it has injected 377.6 billion won into 33 offshore VC funds that raised a combined 3.4 trillion won in vehicles, of which 719.4 billion won were channeled into 367 Korean startups.

Some recipients of the funds have attracted investments from established VC firms, including Sequoia Capital and Goldman Sachs.

Write to Jung-hwan Hwang at jung@hankyung.com
Yeonhee Kim edited this article