[VC House Exploration]③ Doosan-Origin Shinhan Venture Investment Strengthens Collaboration with Shinhan Financial Group

The predecessor is Doosan Group's Neoplux... Acquired for 73 billion KRW
Secondary fund leader buying invested old shares... Plans for Japanese offshore fund 추진

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

Shinhan Venture Investment is a venture capital (VC) affiliated with Shinhan Financial Group. It was not established independently but acquired through mergers and acquisitions (M&A). Shinhan Venture Investment became the 17th affiliate of Shinhan Financial Group in 2020. It transitioned from the Doosan Group to Shinhan Financial, creating synergy effects within the broader 'financial' framework. Under the group's support, it is expanding its investment scope.

Its origin is Neoplux, a venture capital company established by the Doosan Group in 2000. It played a role in Doosan Group's restructuring and portfolio changes. Later, by securing external funds, it transformed into an independent VC. Initially, it mainly invested in companies producing and supplying equipment or parts to IT firms. Subsequently, it steadily expanded its investment areas to mobile solutions, content, environment, and bio sectors.

Neoplux steadily increased its assets under management (AUM) while making diverse investments, establishing itself as a major domestic VC. However, when its parent company faced a crisis, changes followed. In August 2020, Doosan Group sold its stake in Neoplux, a VC affiliate, to Shinhan Financial Group to improve its financial structure. Doosan Group transferred 96.77% of its Neoplux shares for 73 billion KRW.

Entered Top 10 in Domestic VC Industry in 2021

In 2021, Shinhan Financial Group changed Neoplux's name to Shinhan Venture Investment. With a new banner, it accelerated collaboration with group companies. After becoming a subsidiary, it successfully formed the 'Shinhan-Neo Market-Frontier Investment Association No. 2 (committed amount 100 billion KRW)' and the 'Shinhan-Neo Materials, Parts, and Equipment Investment Association (19.9 billion KRW)' through financial support from group affiliates. After joining the 1 trillion KRW club in 2021, it entered the top 10.

Beyond funds, it is expanding its role in the group's innovation growth ecosystem projects such as the 'Shinhan N.E.O. Project,' 'Shinhan Triple-K Project,' and 'Shinhan Futures Lab.' Shinhan Venture Investment participates in major group-level projects led by Shinhan Financial, demonstrating its expertise. Despite the market downturn, it is actively investing backed by Shinhan Financial.

Recently, it raised an additional new fund worth 60 billion KRW. It completed the fund formation within six months after being selected as a general partner (GP) for the Korea Fund of Funds. The Korea Fund of Funds contributed 30 billion KRW, and the remaining half was matched by general corporations and capital firms. The Military Mutual Aid Association also contributed 7 billion KRW to the fund. Using this new fund, it plans to target mergers and acquisitions (M&A) and buyout demands among startups and venture companies.

Shinhan Venture Investment's greatest strength is its secondary market activities. During the Neoplux era, it pioneered the formation of secondary funds, leading the mid-term exit market. In 2002, as Neoplux, it formed Korea's first secondary fund, the 'Pre-KOSDAQ Securitization Fund.' At that time, it raised 50 billion KRW with funding from the Small and Medium Business Administration and major limited partners (LPs) such as the Korea Development Bank.

This fund adopted a strategy of purchasing existing invested shares. At that time, venture capital firms actively invested not only through funds but also via capital injections, creating significant demand for exits. Later, in 2016, Neoplux formed the 'Neoplux Market-Frontier Secondary Fund' with investment from Korea Growth Investment Corporation. This year, it is preparing a new secondary fund.

Startup M&A, Buyouts, and ESG Evaluation Initiatives

The current CEO of Shinhan Venture Investment is Lee Dong-hyun. He graduated from Sogang University with a degree in Business Administration and entered the financial sector in 1997 at Long-Term Credit Bank. He then worked at Muhan Technology Investment and Tube Investment (now HB Investment) before joining Neoplux in 2010, successfully leading various investments.

Shinhan Venture Investment has secured promising portfolios across diverse industries such as bio-healthcare, fintech-ecommerce, gaming-content-media, ICT-digital, manufacturing, and services. Notable portfolio companies with meaningful exit (investment recovery) results include Genoco, TSI, Bioptro, and Andar.

Together with ESG (Environmental, Social, Governance) specialized research firm Sustainvest, it has developed guidelines to assess ESG levels in startup investments. Shinhan Venture Investment is the first domestic VC to receive professional consulting to establish ESG investment standards. It is recognized as an industry leader by setting ESG investment criteria for the domestic venture investment sector.

Additionally, it is the first domestic VC to promote an offshore fund formed and invested in Japan. This is part of strengthening global investments, with Japan selected as the target region. The fund size is expected to be between 50 billion and 100 billion KRW. It plans to invest in promising ventures and startups in Japan, as well as domestic startups preparing to enter the Japanese market. The fund is expected to be launched around October.