The financial district of Yeouido in Seoul. (Yonhap)
SEOUL, Aug. 9 (Korea Bizwire) — South Korea’s major conglomerates are establishing corporate venture capital (CVC) firms under the umbrella of their holding companies as a way to expand investment in promising startups.
Food and entertainment giant CJ Group set up its own CVC firm last week by acquiring a 100 percent stake in Timewise Investment from C&I Leisure Industry Corp. for 22.1 billion won (US$16.9 million).
CJ plans to inject an additional 400 billion won over the next five years to expand its investment in promising startups in the areas of culture, platform businesses and sustainability.
Prior to this, GS Holdings set up a CVC firm, GS Ventures, as a 100 percent-owned subsidiary. GS Ventures completed the first round of fundraising worth 130 billion won last month.
It plans to invest intensively in the group’s new growth areas, including bio-health, climate change response, resource circulation and smart construction.
Early last month, textile and chemical conglomerate Hyosung Group also announced a plan to set up a CVC firm called Hyosung Ventures. The group’s main affiliates will participate in fundraising for Hyosung Ventures.
The venture capital industry expects the emergence of major conglomerates-owned CVC firms to contribute to invigorating investment in domestic startups.
J. S. Shin (js_shin@koreabizwire.com)
