KDB opens VC in US to aid Korean startups' US entry

South Korea’s state-run bank Korea Development Bank (KDB) launched its venture capital (VC) operations in California's Silicon Valley on November 16. The new VC, named KDB Silicon Valley LLC, has secured $5 million in capital for its venture growth project.

It will primarily invest in US-based startups founded by Koreans and Korean startups aiming to enter the US market. In addition, it will support US startups that collaborate with Korean conglomerates through business information or strategizing. The VC will also support US enterprises that operate Korea-based offices and hire employees from Korea.

KDB said the VC will focus on investing in early stages startups or series A investments for some time. The VC will expand follow-up investments for the startups and scaleup ventures through financial partnerships with the KDB headquarters, such as co-investment.

The VC also plans to carry out indirect investment as an institutional investor in venture funds. It aims to expand local networks and deal sourcing channels in the US. In addition, it will promote Korean startups in the US and build partnerships with big-name US VC firms.

Having legally established the US-based VC in April, the bank is planning to set up its second global VC in Europe, although it hasn't yet selected in which European country. Looking to expand even farther afield, it will dispatch a strategic support specialist to Israel in the second half of 2022. The bank’s Seoul headquarters is working with its Singapore-based venture team to support setting more global VC bases. 

KDB has supported venture companies through its venture investment platform KDB NextRound since August 2016. The bank said its venture investment increased to 4.3 trillion won ($3.6 billion) in 2020 from 3.4 trillion won in 2018. 

In November, KDB, Korea’s steelmaking giant POSCO and POSCO-backed science and technology research university POSTECH agreed to jointly invest 200 billion won in eco-friendly tech ventures. At the time, POSCO and KDB said they will together set up a 100 billion won fund and invest another 100 billion won in the startups using POSTECH’s technology for the next five years. The two parties said they will support attracting investment, entry into overseas markets and business collaborations with Korean conglomerates.

Write to Ji-hye Min at spop@hankyung.com
Jihyun Kim edited this article.