By Park Hyong-ki
Mirae Asset Securities said that it will launch a fund with Naver, Korea’s biggest search portal, and Mirae Asset Capital to invest in Korean startups that can generate business developing and using emerging technologies such as Internet of Things (IoT), artificial intelligence (AI), augmented reality (AR) and autonomous vehicle.
Mirae Asset Securities, which is currently merging with Mirae Asset Daewoo, will provide 45 billion won, while Mirae Asset Capital will chip in 5 billion won for the fund. Naver will invest 50 billion won in the fund, according to a regulatory filing.
Naver has recently been receiving applications from entrepreneurs keen on starting a business in the fields, promising them work spaces and support in raising funds for their ventures. This is part of Naver CEO Han Seong-sook’s long-term plan to invest some 500 billion won in tech startups and content creators over the next five years.
Naver and Mirae Asset, however, may face difficulties in spotting the next big thing in Korea as interest in IoT, AR and AI has mostly moved abroad amid a slowdown here.
Industry sources say that there is some lateness in Korea zeroing in on developing new growth engines through such technologies, compared to the U.S., China and Japan.
There was a bubble in the country’s startup sector over the last two years due to the hype on state policies promoting entrepreneurship, resulting in overvaluation and a slowdown in venture capital (VC) investment.
“The interest has waned here, and many venture capital and startups are seeking opportunities abroad because of Korea’s small market size, and cultural and regulatory setbacks to name a few,” said an IT industry source.
Naver seems to be trying to boost the development of those new technologies by supporting local startups.
“But innovation in those areas has been happening really fast overseas including emerging markets like Indonesia where demographics are younger and mobile penetration has skyrocketed. VCs’ interest has moved overseas as well,” a VC source said.
Another industry source mentioned that under the current regulatory and corporate cultural structure, Korea is likely to “produce more of tech followers than innovators.”