Korea Development Bank Leads Market with First Success of 'Equity-Type Rapid Investment'

The First Case After the Enforcement of the Venture Investment Promotion Act, Serving as a Catalyst for the Korean New Deal

[Asia Economy Reporter Jo Gang-wook] KDB Industrial Bank announced on the 28th that it has executed the first investment in the equity-type rapid investment product (SAFE), the first of its kind launched in Korea.

This product is the SAFE, which started in Silicon Valley, USA in 2013, introduced to fit domestic conditions. It allows rapid investment in promising startups without valuation, and the stock issuance price is determined linked to the valuation during subsequent fundraising rounds.

Ark, the first company to receive investment through SAFE, is a venture company manufacturing pet snacks and is standing out in the rapidly growing pet food sector, which has expanded due to lifestyle changes triggered by the COVID-19 pandemic.

KDB Industrial Bank made a rapid investment in Ark, which has high technological capability and growth potential but was facing difficulties in attracting investment due to the spread of COVID-19. As a result, Ark succeeded in opening overseas markets such as the United States and Canada. In addition to the Ark investment, the bank is conducting additional equity-type rapid investment product investments in three other companies, totaling 5.5 billion KRW.

A bank official said, "In addition to the existing debt-type rapid investment product launched in April, this equity-type product investment enables us to support startups in a multi-dimensional way. We will contribute to the Korean New Deal by discovering promising startups, supporting startup activation, and scaling up innovative R&D companies, while leading the domestic venture investment market based on the know-how accumulated from introducing advanced financial techniques."

Meanwhile, with investment sentiment significantly contracted due to COVID-19 and domestic venture investment in the first half of this year decreasing by 17.3% compared to the same period last year, KDB Industrial Bank has raised funds totaling 23 trillion KRW (with a cumulative investment ratio of 50%) as of the end of September to supply large-scale venture capital. This year, it is continuing to expand indirect investment by additionally raising a 2.5 trillion KRW growth support fund. Along with this, it has supported direct investment and financing amounting to 343.3 billion KRW by September this year, which is 2.7 times the total amount of last year, including startup crisis overcoming support programs.