"Discovering technology companies that have not found the market... will support re-attempts via pivoting"

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"We believe that companies which have experienced a painful failure once or demonstrated market fit through appropriate pivoting carry lower risk than early-stage startups. The ability to swiftly adjust strategies in line with market demands is the core of venture growth."

BM Ventures, a limited liability company (LLC)-type venture capital firm launched in April 2019, aims to reach an assets under management (AUM) of 200 billion won as it enters its eighth year. The firm operates under a four-partner structure including Co-CEO Jung Sung-min and Director Kwon Soon-guk and Executive Vice President Park Se-young from POSCO Technology Investment, and Co-CEO Jeong Eun-ho from Future Asset Venture Investment. BM Ventures focuses on investments in materials, components and equipment (소부장) and deep tech sectors.

BM Ventures was selected as a general partner (GP) for the "re-attempt" category in the first round of the fund of funds (Korea venture fund) scheduled investment program this year. Following its selection as a GP for the "rookie" category in 2024, it has once again secured capital from the fund of funds (Korea venture fund). Co-CEO Jung Sung-min stated, "This re-attempt fund is planned to be established with a scale of 30 billion won. If we successfully raise 18 billion won from the fund of funds (Korea venture fund) and complete the fund establishment, AUM will grow to 154.1 billion won."

In its early years, BM Ventures focused on pre-IPO equity investments and secondary transactions based on the partners' networks. The company AP-R recorded a return of 8.4 times per single investment, while establishing its foundation through IPO exits from three companies including ALBW and Wylab.

Since Executive Vice President Park Se-young joined in 2022, the firm shifted its investment strategy to focus on discovering materials, components and equipment (소부장) and deep tech companies, including those in secondary batteries. It established a private blended fund with a scale of 17 billion won and a specialized fund for secondary batteries worth 16 billion won, building a track record in these sectors. In 2024, BM Ventures was selected as a GP for the fund of funds (Korea venture fund) rookie league, raising a fund of 15 billion won—exceeding its target of 13.5 billion won—to expand investment resources.

BM Ventures plans to actively seek out companies undergoing pivoting through new funds raised via this year's fund of funds (Korea venture fund) program for the "re-attempt" category. Starting this year, the fund of funds (Korea venture fund) expanded its investment targets to include companies that have a track record of switching strategies, products, or services after previous business failures. BM Ventures intends to focus on identifying such companies in response to these regulatory changes.

Noting that materials, components and equipment (소부장) industries typically require long R&D periods, leading to many cases where successful technology development fails due to misalignment with market demand, the firm emphasized this challenge. Executive Vice President Park Se-young stated, "Companies that failed despite possessing good technology because it did not match market demand are more likely to succeed when given new opportunities. We will actively leverage our experience from my tenure at POSCO Technology Investment, where we connected materials, components and equipment (소부장) companies with large corporations to pioneer new business areas, drive revenue growth, and support pivoting."

Additionally, considering that materials, components and equipment (소부장) companies often establish bases in regional areas to secure production facilities, BM Ventures plans to invest approximately 30% of the new fund's capital in firms located outside major metropolitan areas.

Operating with a lean team, BM Ventures is overcoming human resource limitations by leveraging generative AI. The AI has significantly replaced the extensive basic research tasks previously performed by investment reviewers to prepare reports for the Investment Review Committee, enabling the four core partners to focus directly on deal sourcing and supporting portfolio companies.

Co-CEO Jung Sung-min said, "We have greatly reduced the time required for basic research during the investment review process. As a result, our partners can now actively scout promising companies in the field and provide close support even after investments are made."

For investment validation, the firm utilizes its own evaluation framework called 'Re-MAP'. Learning from overheated startup investment trends such as the "biotech venture boom," BM Ventures conducts in-depth evaluations of companies based on five key criteria: reproducibility of failure causes, level of technology internalization, execution capability of the founding team, market fit (profitability potential), and policy alignment.

Representative portfolio companies identified through the Re-MAP validation system include InnoXion Tech, which holds plasma coating technology for dry electrodes in secondary batteries; JR Energy Solution, which pioneered a battery electrode foundry business model in the industry and is expected to reach its break-even point (BEP) this year; and Creaver Corporation in the beauty sector, which recorded 200 billion won in revenue and 40 billion won in net profit in the first quarter of this year, showing strong global growth momentum.

Co-CEO Jung Sung-min stated, "This year, we plan to challenge projects such as Shinhan Asset Management's private fund-of-funds business and establish additional blended funds with a scale of 22 billion won. We aim to discover promising companies, create additional project funds, and challenge our AUM target of 200 billion won."

[MoneyToday startup media platform Unicorn Factory]