[VC House Exploration]② Leading Financial Group VC KB Investment

Operating Assets Near 2 Trillion... Industry Leader Korea Investment Partners in Fierce Pursuit
Bio Investment Office to Be Established in the U.S. Next Month... Aggressive Bio Investment Planned

Editor's NoteAs the venture investment market loses momentum, the government is introducing various incentives to stimulate investment. The venture investment industry believes that no matter how good the policies are, they are useless if venture capital (VC) firms do not take action. In the market, the 'role theory' of major venture capital firms with financial capacity is gaining attention. We examine their profiles to understand the venture investment ecosystem.

KB Investment is a venture capital (VC) firm affiliated with KB Financial Group. It was established independently rather than through mergers and acquisitions (M&A). Among financial group-affiliated VCs, it has a relatively long history. It is regarded as a capable house within the entire VC industry. While all four major domestic financial groups?Woori Financial Group (Woori Venture Partners), Shinhan Financial Group (Shinhan Venture Investment), and Hana Financial Group (Hana Ventures)?own VCs, KB Investment maintains its leading position.

Its origin is Jang Eun Venture Investment, a venture capital company (venture investment firm) established in 1990. Since its founding, Jang Eun Venture Investment formed three investment partnerships to invest in venture companies. It deployed investment officers with engineering backgrounds to the front lines, standing out in investments in semiconductor equipment companies. Representative examples include Mirae Industry, a semiconductor-related equipment manufacturer, and Comtec System, a network system company.

Jongpil Kim, CEO of KB Investment

After a capital increase in 1992, the company changed its name to Kookmin Venture Investment in 1998. In 1999, during the merger of Korea Long-Term Credit Bank and Kookmin Bank, Kookmin Bank became the largest shareholder. In 2001, it merged with Frontier Investment. Subsequently, in 2002, it also merged with Kookmin Technology Finance, further expanding its scale. In 2004, it rebranded as KB Venture Investment, and with the establishment of KB Financial Group in 2008, it was reborn as KB Investment and incorporated as a financial group affiliate.

First-generation Domestic VC... Vanguard of Domestic and International Venture Investment

KB Investment has conducted several paid-in capital increases targeting KB Financial Group, which holds 100% of its shares, resulting in current capital of approximately 112.6 billion KRW. Its assets under management (AUM) have surpassed 2 trillion KRW. It ranks second in AUM after Korea Investment Partners, the industry leader. The industry expects KB Investment to narrow the AUM gap with Korea Investment Partners.

The first fund formed this year is the 250 billion KRW 'Global Platform Fund No. 2.' Investors (LPs) include KB Kookmin Bank, KB Securities, KB Capital, KB Insurance, and KB Kookmin Card. Including the general partner's (GP) commitment, KB Financial Group invested a total of 200 billion KRW. Additionally, five subsidiaries of the Kolmar Korea Group participated as LPs, each investing 10 billion KRW, totaling 50 billion KRW.

Executive Director Yoo Jeong-ho of the Global Investment Group and Executive Director Kook Chan-woo of the Bio Investment Group manage the fund. The fund aims to secure global investment growth momentum. Major investment targets are startups in Southeast Asia and India, as well as U.S. bio and healthcare startups. Up to 30% of the fund's resources will be allocated to promising domestic startups.

The Global Platform Fund was launched under the leadership of CEO Kim Jong-pil. CEO Kim graduated from Sogang University with a degree in Business Administration and began his career as a venture capitalist at KTB Network (now Woori Venture Partners) in 1997. He then worked at Mirae Asset Venture Investment before moving to Korea Investment Partners in 2000. After serving as Head of Investment, Chief Investment Officer (CIO), and Vice President, he became the head of KB Investment in 2018.

KB's First VC-Origin CEO Kim Jong-pil's Leadership 'Smooth Sailing'

CEO Kim is recognized for growing Korea Investment Partners into the industry leader during his 17 years there. KB Financial Group Chairman Yoon Jong-kyu took notice of him. Until CEO Kim, KB Investment's CEOs had been bank veterans for over 20 years, but Chairman Yoon broke this tradition by recruiting CEO Kim.

KB Investment has secured a diverse portfolio over time. Among them, Genomictree is considered a representative portfolio. KB Investment invested in Genomictree in 2015 and recovered more than 19 times the invested principal. It also achieved over 10 times returns from investments in PharmAbcine and E&Di.

Since his appointment, CEO Kim has driven not only quantitative growth but also qualitative growth. Recently, he established 'KB Founders Club (KBFC),' an organization dedicated to early-stage investments, accelerating investments in early-stage companies. KBFC was founded early last year as a direct report to the CEO. It focuses on investments from the seed stage to Series A. It utilizes funds such as the 'KB Telecom 3 Companies ESG Fund (40 billion KRW),' with the three major telecom companies as LPs, the 'KB Prime Digital Platform Fund (30 billion KRW),' and 'KB Founders Club 2022 (30 billion KRW),' where KB Financial Group affiliates are key LPs.

Meanwhile, KB Investment plans to establish a bio investment office in the U.S. next month. The location has been selected as the Boston bio cluster, home to many global pharmaceutical companies. This marks KB Investment's first overseas office. Amid a downturn in bio investments, it signals an aggressive bio investment strategy.