KB to raise $150 mn India, SE Asia-focused VC fund

KB Investment Co., a venture capital arm of KB Financial Group, is seeking to raise more than 200 billion won ($150 million) in its second global fund, targeting startups in India and Southeast Asia as well as biotechnology ventures overseas.

More than half of the venture capital fund will be allocated to India and Southeast Asia-based companies, with another 30% to be set aside for biotech ventures, according to people familiar with the matter on Thursday.

KB Financial Group’s major units and other multiple strategic investors will participate as limited partners in the fund, which the country’s largest banking group is aiming to close by the end of this year.

In addition to capital gains, the new fund is expected to help KB Financial expand its footprint in overseas markets.

“This fund is meaningful for us to cement our leading position against rival financial groups and build our signature brand,” a KB Investment official told The Korea Economic Daily,

“We’re also exploring ways to form partnerships with local VCs there.”

KB Financial, the parent group of South Korea’s largest retail lender Kookmin Bank, is trying to establish networks with VC firms in other countries and co-manage the fund as its first global fund did.

FIRST FUND

The new fund will follow KB’s first global investment vehicle, the Global Platform Fund, which closed at 220 billion won ($240 million) in 2019 and has deployed 93% of its capital to target assets. It was supposed to allocate about 60% of the committed capital to overseas startups.

The first global fund’s assets under management (AUM) swelled by 50% to 320 billion won ($240 million), compared to its original fund size. The AUM includes both the redemption value and the residual value of the companies it has invested.

Grab Holdings Inc., known as the Uber of Southeast Asia, was one of its noteworthy investments.

The Southeast-based ride-hailing and food delivery company generated a handsome return after it made a spectacular debut on Nasdaq last year.

FUNDS OF FUND IN MALAYSIA, INDONESIA

For the first fund, KB Investment launched funds of fund (FoF). One of them includes the Hibiscus Fund, created in a partnership with Malaysia-based RHL Ventures earlier this year. The FoF raised more than 80 billion won, surpassing its target amount of 50 million.

The VC fund, named after the namesake tropical flower, plans to deploy half of the capital to Malaysian startups and the other half to ventures in other parts of Southeast Asia.

In Indonesia, another FoF, the Centauri Fund, was launched jointly with Telkom Group-owned VC firm MDI Ventures. Telkom is Indonesia’s largest telecommunications company.

The Centauri Fund closed at 45 billion won to invest in fintech and e-commerce startups in Southeast Asia.

Among its investment assets, the value of two Indonesian firms -- insurtech platform Qoala and fintech venture Cermati -- has risen three to five-fold since its investment.

INDIA

Another FoF zoomed in on Indian ventures, for which KB set up a 145 billion vehicle jointly with Seoul-based Paramark Ventures.

The India-dedicated fund has invested 6 billion won in a second-hand car platform Spinny, which has seen a five-fold increase in its enterprise value since KB's investment.

Other portfolio companies include API Holdings, India’s largest digital healthcare platform, the value of which has grown four-fold.

BIOTECH FUND

For biotech startups, KB Investment teamed up with the US-based RM Global Partners to create a 70 billion won Global Bio Access Fund last year. It was the first biotech-focused fund launched jointly between VC firms in Korea and the US.

The US-based OncXerna Therapeutics Inc. is a key portfolio company of the biotech fund. The immune-targeted therapies developer is expected to go public on Nasdaq later on.

Also, KB Investment is the only Korean VC on the list of shareholders in SK Biopharmaceuticals’ new Chinese unit, Ignis Therapeutics, a central nervous system-focused biotech company.

The Korean VC firm bet on the US-based anti-cancer drug developer Adicet Bio as well, before it made a trading debut on Nasdaq in 2020.

KB Financial’s units span banking, brokerage, insurance, credit card, asset management, second-tier lender and installment finance company.

Write to Jong-Woo Kim at jongwoo@hankyung.com
Yeonhee Kim edited this article