Korean VCs look for next Grab, Gojek startups in Singapore

South Korea’s leading venture capital companies with at least 1 trillion won ($711 million) in assets under management are looking for promising startup companies in Singapore.

The Asian city-state is emerging as an alternative to Hong Kong as Asia’s financial hub, and the service industry, in particular, is expected to swiftly recover from the COVID-19 pandemic.

According to venture capital industry officials, Daol Investment Co., a unit of Daol Financial Group, formerly known as KTB Financial Group, last month opened its Singapore office to look for investment candidates.

Its advance into the Singaporean market follows the launch of a branch in Thailand in 2008 and another in New York in 2019.

“Singapore is the best place to discover Asian startups, as major Southeast Asian markets such as India, Indonesia and Thailand can be reached in just a few hours by plane. Southeast Asian startups have been growing rapidly since the COVID-19 outbreak,” said Daol Investment Chief Executive Kim Chang-kyu.

While Atinium Investment with 1.2 trillion won in AUM opened its Singaporean office last November, STIC Investment launched its branch there in April.

Enlight Ventures, another Korean private equity firm, is also preparing to enter the Singaporean venture capital market.

"We plan to establish a local corporation and expand overseas investment as we were named a joint management company of the Green Climate Fund (GCF) with Singapore’s Cento Ventures,” said Chief Executive Moonsoo Park.

Enlight Ventures aims to raise $100 million by year-end for investment in Korean startups when they form joint ventures with local companies in Singapore, he said.

Korea Investment Partners is Korea’s first venture capital firm that entered the Singaporean market.

With 2.6 trillion won under management, the company established its Singapore corporation in October 2019, before the pandemic.

NEXT GRAB, SECOND GOJEK

“Korean venture capital is relatively well known in Singapore with the growing number of Korean VCs there,” said Kim Jong-hyun, chief of Korea Investment Partners’ Singapore office. “Korean VCs are actively looking for the next Grab or the second Gojek.”

A unicorn born out of Singapore, Grab was established in 2012 as a ride-hailing service. The company has since then expanded its operations in not just the ride-hailing sector but also in new business verticals such as food delivery, grocery shopping, logistics delivery and financial services.

Indonesia’s Gojek is another success story.

Founded in 2010 in Indonesia as a motorcycle ride-hailing and courier service call center, Gojek launched its app in 2015. The company also operates in Thailand, Vietnam and Singapore.

According to accounting consulting firm KPMG, Singapore's funding in the fintech sector reached $2.14 billion in the first half.

Data from the Korea Venture Capital Association (KVCA) showed Korean VCs invested a combined 79.3 billion won in Singapore startups last year, the second most after 351 billion won in US startups.

Write to Lan Heo at why@hankyung.com
In-Soo Nam edited this article.