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
[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 timeline (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 financial circles 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 Forward Base for Domestic Startups’ Globalization
The advancement of the establishment timeline is analyzed to have been influenced by Chairman Lee’s special interest. His strong will to wage an ‘all-out war’ for startup cultivation 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 to build networks for several years," 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 judged necessary to support globalization so that startups, which inevitably feel limitations in the narrow domestic market, do not miss their growth opportunities.
KDB’s establishment of the 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 fostering global unicorns by helping startups with overseas expansion and scale-up."
KDB decided to invest $5 million (approximately 5.565 billion won) in capital to establish ‘KDB Silicon Valley.’ The inaugural CEO is Seong-hoon Seo, former team leader of the Next Round Office, who has overseen KDB’s market-type investment attraction platform ‘KDB Next Round.’
KDB Silicon Valley will begin full-scale operations such as direct investment and fund contributions locally in the US from the second half of this year. The organization, including staffing, is currently being formed. A KDB official said, "Currently, we are at the stage where initial capital has been invested, and we are accelerating preparations for full-scale operations in the second half."
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