[For more diverse corporate information on the startups mentioned in this article, please visit the Unicorn Factory big data platform 'Data Lab'.]
It was revealed that all six ACs (Accelerators) failed the document review for the asset management company of the National Growth Fund's ultra-long-term technology investment fund (early-stage fund), which has a maturity of 15 years. Although expectations arose that opportunities might be given to ACs, who discover and nurture early-stage companies due to the nature of the fund, they ultimately failed to overcome the barrier of insufficient fund management experience compared to VCs (Venture Capital).
According to Korea Development Bank on the 29th, a total of 14 companies passed the review in the document review for ultra-long-term fund asset managers, including eight companies in the mid-size category and six in the small-size category. This review selected twice the number of planned selections, and future on-site inspections and face-to-face reviews will be conducted to ultimately select seven companies: four in the mid-size category and three in the small-size category.
Initially, a total of 55 companies applied for the ultra-long-term fund asset manager recruitment, including 14 in the mid-size category and 41 in the small-size category, drawing attention. This is because the fund carries significant symbolic weight, and the government will contribute 680 billion won (77%) out of the total target amount of 880 billion won for fund formation, reducing the burden of raising private funds. As a result, the competition ratio in the small-size category reached as high as 13.7 to 1.
In this recruitment, six ACs listed their names alongside PE (Private Equity) and VC firms: △Blue Point Partners △Sunbow Angel Partners △Schmidt △Yonsei University Technology Holding △Zephyrus Lab △Korea Science and Technology Holding. It was judged that ACs had an advantage due to the nature of the ultra-long-term fund, which primarily invests in early-stage companies. There were also expectations that Schmidt, Zephyrus Lab, and Blue Point could compete, as their annual investment amounts range from 10 billion to 30 billion won, indicating a considerable amount of investment experience.
However, all six of these firms failed to clear the threshold of the document review. It is interpreted that this was influenced by the fact that the fund formed through this contribution is large in scale—160 billion won for mid-size and 80 billion won for small-size—and they relatively lack experience in managing large funds and have not yet accumulated many investment and recovery track records.
In the AC industry, reactions of regret are accompanied by voices of self-reflection. It is pointed out that this failure in the contribution project shows a phenomenon where the entire industry is losing competitiveness in the investment sector, rather than being an issue with individual ACs.
An AC industry official stated, "The ultra-long-term fund is most suitable for ACs that discover and invest in startups early to support their growth, and the Financial Services Commission also took this into account by including ACs in the recruitment targets just before the announcement," adding, "It means that even ACs who actively engage in investment challenged and failed, indicating that the entire AC industry is showing deficiencies in fund management and other areas."
In fact, the presence of ACs is increasingly weakening in the venture investment market. According to an industry white paper published by the Early-Stage Investment Accelerator Association, as of the first half of last year, 64.1% of ACs had cumulative investment amounts of less than 2 billion won since their establishment. 22.6% had no experience in venture investment at all.
Accordingly, ACs that value venture investment are acquiring additional VC licenses to maintain and prove their competitiveness. Futureplay, Soopong Ventures, and Atri Holdings are representative examples. The two firms that passed the document review this time, Smilegate Investment (mid-size) and Futureplay (small-size), are also asset managers holding both AC and VC licenses simultaneously.
An industry official said, "While avoiding regulations on AC initial investment obligations is cited as the main reason for securing additional VC licenses, it is likely that there was also a judgment that proving competitiveness in the venture investment market is difficult with only an AC license," adding, "For ACs to play a role not just as mentors to startups but as venture investors, efforts of self-reflection must follow."
Meanwhile, the asset managers that passed the document review for this ultra-long-term fund include eight in the mid-size category: Daesung Venture Investment, Magna Investment, Smilegate Investment, Shin Young Securities and SJ Investment Partners (Co-GP), L&S Venture Capital, We Ventures, Kolon Investment, and Quantum Ventures Korea; and six in the small-size category: DTN Investment, G-Tech Venture Investment, K Investment Partners, Timefolio Asset Management and Timefolio Capital (Co-GP), Futureplay, and Hanwha Investment & Securities.
[MoneyToday Startup Media Platform Unicorn Factory]
in FUTURE
