Target Information

Hysys Ventures, the corporate venture capital (CVC) arm of Hyosung, has made its inaugural investment through the 'Startup Korea Fund (SCO Fund)'. This investment consists of four companies: 'Izen Science', an AI-based drug development firm; 'Wired Company', an e-commerce platform; 'Near Solution', which provides smart logistics solutions; and 'Kuntech', a convergence security firm.

The investment was executed on June 27 and July 10, 2023, as part of the SCO Fund, which was established in collaboration with Korea Venture Investment Corp. The fund has a total capital of 100 billion KRW and aims to invest in deep-tech startups within ten leading technology sectors, including bio-health, eco-friendly energy, robotics, semiconductor systems, AI, aerospace and marine technology, next-generation nuclear power, and quantum technology.

Industry Overview

South Korea's technology sector has been experiencing rapid growth, particularly in deep technology fields. The AI market, for instance, is anticipated to expand significantly due to the increasing integration of AI in various sectors, including healthcare, logistics, and security. Startups in these domains are benefiting from government initiatives and investment funds dedicated to enhancing technological capabilities in South Korea.

In the bio-health sector, the demand for innovative drug development solutions is rising, particularly given the increasing focus on personalized medicine. Companies like Izen Science, which leverage AI for drug discovery, are positioned to meet these demands effectively, potentially leading to faster development timelines and reduced costs.

The e-commerce industry is also flourishing in South Korea, driven by changing consumer behaviors and technological advancements. Startups such as Wired Company are capitalizing on these trends by providing comprehensive platforms that streamline various aspects of e-commerce, from sourcing to payment and customer service.

Moreover, as industries continue to digitize, the need for cybersecurity solutions is more critical than ever. Firms like Kuntech, which specialize in operational technology (OT) security, are well-placed to address the increasing cybersecurity challenges across various sectors, highlighting the importance of robust security measures in a connected enterprise landscape.

Rationale Behind the Deal

The rationale for Hyosung Ventures’ latest investments centers around the necessity of supporting high-tech startups that demonstrate significant potential in their respective sectors. By focusing on companies that are at the forefront of innovation, Hyosung aims to stimulate technological advancement within South Korea’s ecosystem. The financial backing will not only aid these startups in scaling but also contribute to the overall growth of the deep-tech landscape in the nation.

Furthermore, the selection of these specific startups aligns with the strategic vision of the Startup Korea Fund, which seeks to promote technological expertise and create synergies within the ten identified leading technology areas.

Investor Information

Hyosung Ventures is a prominent player in the investment landscape, known for its commitment to accelerating the growth of innovative companies through strategic funding. The firm leverages its industry expertise and network to not only provide financial support but also to guide startups in navigating various challenges encountered in their growth phases.

In addition to the Startup Korea Fund, Hyosung Ventures has also co-established the 'Hyosung CVC Scale-up New Technology Investment Fund No. 1' in collaboration with the Korea Industrial Technology Advancement Agency (KIAT), which has already made significant investments in eight companies across AI, IT, materials, and fintech sectors.

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From an investment perspective, Hyosung Ventures' focus on high-potential technologies positions it favorably to reap significant returns. The involvement in key technology areas, particularly in a rapidly evolving market such as South Korea, could offer impressive dividends in the medium to long term.

The choice of startups to invest in demonstrates a clear understanding of market trends and demands, particularly in areas such as AI and cybersecurity, which are crucial for the future of many industries. By backing these innovative companies, Hyosung is not merely investing in individual startups but in the broader technological ecosystem that is set to flourish.

Moreover, the current momentum in South Korea’s government policy favoring venture capital investments and technological innovation adds another layer of assurance. With the backing of state initiatives, these startups may have an even greater chance of success, making Hyosung's investment strategy compelling.

Overall, this deal aligns well with emerging trends in technology and showcases Hyosung Ventures as a forward-thinking investor committed to nurturing the next generation of tech leaders in South Korea.

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