Korea Development Bank (KDB) announced in November that it started to make investments in venture startups by opening KDB Silicon Valley, a venture capital subsidiary of KDB, in Silicon Valley of the United States on November 16.
KDB Silicon Valley can carry out direct investment and fund investments in the local area.
The company plans to actively strive to strengthen the status of ethnic Koreans in Silicon Valley, such as making direct investment in local startups founded by ethnic Koreans through networking activities with local startups and investors in ecosystems of Silicon Valley, a hub of global innovation.
In addition, KDB Silicon Valley plans to build a strong network with ethic Korean engineers and Korean venture capital firms and large Korean companies and related Korean organizations active in Silicon Valley.
Its plans to play a help Korean startups enter the Silicon Valley area. KDB Silicon Valley started its business with total capital of $100 million.
Meanwhile, the company plans to start full-fledged activities starting from the end of 2021, after completing a capital increase, finding potential investment targets through local market research and improving its investment system.
Its main direct investment targets are startups founded by ethnic Koreans in Silicon Valley and Korean start-ups entering the United States.
The investment targets also include U.S. startups that enter Korea by collaborating with large Korean companies for open innovation, open their offices and hire Korean development personnel in Korea, among others.
For now, KDB Silicon Valley will concentrate on investing in startups in their early stages rather than making massive investments.
Later, It will make a joint investment with the headquarters of KDB for the purpose of ramping up investments in startups in their late stages. Also on the table are KDB Silicon Valley’s joint investments with large U.S. VC firms.
KDB Silicon Valley is responsible for the advancement of Korean startups into Silicon Valley and the return of their successful experiences and investment results in Silicon Valley to Korea.
To this end, KDB Silicon Valley plans to cooperate closely with the headquarters of KDB in Seoul, Korea, in order to utilize the headquarters’ various startup support experiences and direct and indirect investment experiences.
In terms of financial support such as direct and indirect investment, KDB is playing the role of the largest venture capital in Korea.
The state-run Korean bank is supporting domestic venture ecosystems through KDB Next Round, Korea's leading investment attraction platform, KDB NextONE, a program to foster startups and NextRise, the largest startup fair in Korea, which KDB co-hosts with the Korea International Trade Association and others.
Meanwhile, the Edison Motors consortium selected as the preferred bidder for Ssangyong Motor indirectly pressured KDB to give the consortium a loan of 800 billion won, KDB submitted its opinion to Seoul Rehabilitation Court just before signing a memorandum of understanding (MOU).
The opinion was that, “The Edison Motors consortium pressuring KDB for a loan of 800 billion won may serve as a reason for KDB’s cancellation of the selection of the Edison Motors consortium as the preferred bidder for Ssangyong Motor.
This backlash from KBD scratched off funding support phases in the MOU between Edison Motors and Ssangyong Motor.
As acquisition negotiations began for the conditional acquisition, KDB, the main creditor, took a negative stance on the loan.
Edison Motors’s takeover of Ssangyong Motor is known to require at least one trillion won in management normalization funds, and will face a bumpy road, analysts say.
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