Korea Development Bank Completes Establishment of Venture Capital Subsidiary in US Silicon Valley

Establishment of 'KDB Silicon Valley'... 74th Subsidiary
Evaluated as a Global Startup Nurturing Outpost
Active Response to Government New Deal Policy and Second Venture Boom

Lee Dong-geol, Chairman of the Korea Development Bank. (Photo by Korea Development Bank)

[Asia Economy Reporter Jin-ho Kim] KDB Industrial Bank has completed the establishment of a venture capital (VC) subsidiary in Silicon Valley, USA. The establishment process was completed within the first half of the year, ahead of the initially expected schedule (second half of this year). This is interpreted as a result reflecting Chairman Lee Dong-geol's determination to accelerate investment in new growth innovative companies that will lead the Fourth Industrial Revolution era.

According to the financial sector on the 14th, KDB recently established a venture capital firm called 'KDB Silicon Valley' locally in the US and incorporated it as its 74th subsidiary.

Originally, KDB planned to establish a VC subsidiary in Silicon Valley last year to support domestic startups' overseas expansion and foster global K-unicorns (companies valued at over 1 trillion won). However, due to the full spread of COVID-19 in the US, conditions were unfavorable, leading to a revision of the target to the second half of this year. Ultimately, the subsidiary was established at least 2 to 3 months earlier than the revised plan.

Expected Role as a Foothold for Domestic Startups' Globalization

The advancement of the establishment schedule is analyzed to have been influenced by Chairman Lee's special interest. His strong will to wage an 'all-out war' for nurturing startups internally brought about quick results. His theory is that with sufficient investment and infrastructure, South Korea can also create global innovative companies like Airbnb, Uber, and Amazon.

A national policy bank official said, "KDB has been steadily preparing by sending employees to Silicon Valley for several years to build networks," adding, "As the COVID-19 situation in the US has recently improved, it is understood that the establishment of the local corporation, one of the chairman's core projects, was expedited."

The environment faced by domestic startups is also cited as a reason for hastening the establishment. It is based on the judgment that it is necessary to support globalization so that startups, which inevitably feel limitations in the narrow domestic market, do not miss their growth period.

KDB's establishment of a Silicon Valley VC subsidiary is highly evaluated as it supports the government's New Deal policy and the creation of a second venture boom. A financial sector official said, "In the future, it is expected to play a more active role in helping startups expand overseas and scale up, fostering global unicorns."