Will NeoInsight Ventures Return Its License After a Year of 'Idle Operation'?

No Investment Activity Since Establishment in January 2022
Received Correction Order from Ministry of SMEs and Startups
Attention on Whether New VC Startup Returns License

Logistics company NBV Networks' venture capital (VC) firm Neo Insight Ventures is currently 'dormant.' According to the Small and Medium Business Startup Investment Company electronic disclosure (DIVA) on the 22nd, Neo Insight Ventures recently received a corrective order from the Ministry of SMEs and Startups for 'no investment for one year.' This is because it has not made a single investment since its launch in January last year.

It violated Article 49, Paragraph 1, Subparagraph 4 of the Act on the Promotion of Venture Investment related to investment activities. According to this law, if a startup investment company does not make investments according to relevant regulations for more than one year without justifiable reasons, it faces disadvantages. Following the corrective order, the process may proceed to warnings, suspension of operations, and ultimately, the cancellation of the startup investment company (venture capital firm) registration.

If an investment is made within three months after receiving the corrective order, the disadvantages can be avoided. The scheduled action date is in August. If no investment is made even after three months from the corrective order, additional penalties such as warnings and suspension of operations may be imposed. This effectively makes it difficult to operate as a venture capital firm.

Neo Insight Ventures applied for venture capital firm approval from the Ministry of SMEs and Startups and also joined as a full member of the Korea Venture Capital Association. Although it has made efforts to enter the institutional system, it has attracted industry attention for not carrying out venture investments, which are the essence of venture capital.

The number of non-investing venture capital firms continues to increase. Currently, small and medium-sized houses are struggling to raise funds. Due to a shortage of investment capital and a decline in the valuation of investee companies, there is a cautious atmosphere. Despite having professional personnel, they are unable to execute investments and are labeled as 'non-investing VCs.'

A venture capital industry official said, “The increase in non-investing VCs, unlike previous years, means that the market situation is difficult,” adding, “Many are still struggling to form funds.” He also added, “The atmosphere that the second half of the year is the right time for investment also plays a part.”

The largest shareholder of Neo Insight Ventures is NBV Networks, holding 50% of the shares. NBV holds 10%. Additionally, three individuals share the remaining shares with 15%, 15%, and 10%, respectively. The total number of issued shares is 400,000, with a par value of 5,000 KRW.

NBV Networks is a maritime transportation company. It operates businesses including maritime transport, ship brokerage, chartering, air transport, steel materials, coal materials, raw materials, wholesale and retail, trade, e-commerce, real estate development, and consulting. Its parent company is NBV Logistics, established in 2017. After absorbing NBV International, it was reborn under the name NBV Networks.

As a newly established company, it was expected that the first fund would be supported by the parent company NBV Networks, but there has been no news of new fund formation.