Banks Investing Heavily in Startups

[Asia Economy Reporter Song Hwajeong] Recently, banks have been putting effort into nurturing startups by creating funds and investing in them.

According to the financial sector on the 6th, Shinhan Financial Group established a digital strategic investment (SI) fund called ‘One Shinhan Connect New Technology Investment Association No. 2’ on the 4th to accelerate digital transformation and ecosystem expansion.

The ‘One Shinhan Connect New Technology Investment Association No. 1,’ which Shinhan Financial created in April last year as the first of its kind among domestic financial companies with a scale of 300 billion KRW, has so far completed investments totaling 224.5 billion KRW in 18 promising startups across various fields such as blockchain, commerce platforms, and proptech.

The newly established One Shinhan Connect New Technology Investment Association No. 2 was created with a scale of 300 billion KRW through joint investment by group affiliates, similar to the No. 1 fund, and Shinhan Capital is expected to manage the fund. Shinhan Financial plans to strengthen investments in various companies possessing promising digital technologies such as artificial intelligence (AI), blockchain, digital assets, Web 3.0, and the metaverse through this fund.

Additionally, through partnership-based collaboration, they plan to launch various products and services that transcend the boundaries between financial and non-financial sectors and create a differentiated digital ecosystem for Shinhan Financial that grows together with invested companies.

Hana Financial Group also established a 300 billion KRW SI fund called ‘Hana Beyond Finance Fund’ to nurture innovative technology ventures and startups.

This fund, formed as a new technology business investment association, primarily targets promising domestic and international companies in innovative technology fields attracting attention as future growth engines, such as the metaverse, AI, big data, proptech, mobility, insure-tech, and healthcare.

The Hana Beyond Finance Fund will be co-managed by Hana Ventures and Hana Financial Investment. Additionally, Hana Bank, Hana Card, Hana Capital, Hana Life Insurance, and Hana General Insurance will participate as limited partners (LPs).

Hana Financial Group plans to support promising venture and startup companies to grow into unicorns by forming a close collaborative network between the invested companies and the group’s major affiliates through this fund.

Furthermore, by continuously discovering innovative companies capable of creating synergy with Hana Financial Group’s affiliates, they aim to establish an open virtuous cycle structure for mutual growth. Through this, they will further accelerate the realization of the ‘Digital First’ initiative that Hana Financial Group is focusing on.