[VC Now]⑥ Stonebridge Ventures "We Will Become the VC That Is LPs' Top Pick"

Interview with Yuseungwoon, CEO of Stonebridge Ventures
Semiconductor and AI-focused VC
"The company's growth engine is diversity"

Editor's NoteVenture capital (VC) nurtures early-stage companies that will become the pillars of future industries at the forefront of the capital market. Although the VC industry is experiencing a downturn due to the global economic recession and high interest rates, efforts to identify and grow promising companies continue unabated. Asia Economy meets a variety of investment firms, from large-scale VCs with accumulated experience and know-how to emerging VCs, to hear about their investment strategies and stories.

"I want to create a company that becomes the top pick for limited partners (LPs) when they think of venture capital (VC)."

Recently, at the Stonebridge Ventures office in Yeoksam-dong, Gangnam-gu, Seoul, CEO Yoo Seung-woon said, "I believe it is more important to be a company that LPs recall when they think of us rather than just focusing on superficial numbers."

Stonebridge Ventures was established in 2017 through a physical division of the venture capital business unit of Stonebridge Capital (now Stonebridge Holdings). As of the end of last year, its assets under management (AUM) reached 1.3336 trillion KRW. Since its inception, it has invested approximately 1.11 trillion KRW in about 270 companies, producing a total of nine unicorns (unlisted companies valued at over 1 trillion KRW), including Dunamu, Pearl Abyss, and Musinsa. Based on this experience, it is now evolving into a VC focusing on deep tech industries such as semiconductors and artificial intelligence (AI).

CEO Yoo has led Stonebridge Ventures since 2019, after working at CJ Investment, SoftBank Ventures Asia, and Kakao Ventures. He is the person who grew Stonebridge Ventures into a large VC with an AUM exceeding 1 trillion KRW.

Yoo Seung-woon, CEO of Stonebridge Ventures. Photo by Stonebridge Ventures

Large VC with 1.4 trillion KRW AUM... Growth Driver is 'Diversity'

He said, "I have been in charge of the company for five years, and the external change is the AUM," adding, "Combining VC funds and private equity (PE), the total is about 1.4 trillion KRW." He continued, "Internally, we have internalized the experience of success. The difference between having and not having success experience is significant, and instilling this in the company is a positive aspect."

He cited 'diversity' as the core driving force behind the company's growth. Stonebridge Ventures is composed of experts from various fields, including former accountants, securities firms, pharmaceutical companies, semiconductor manufacturing engineers, and corporate strategic investment. CEO Yoo noted, "If the team consists of similar people, the scope of investment can become narrow," emphasizing, "Stonebridge's characteristic is that the investment team has diversity." He explained, "If there is a technology that will develop further or a newly emerging market, the composition of members needs to diversify. After taking charge of Stonebridge Ventures, I prioritized this aspect the most."

He warned against the stagnation of VCs. CEO Yoo explained, "It is risky when similar people gather in any group. You might get away with it a few times, but if it continues, it eventually leads to an unhealthy direction." He added, "Because there are diverse people, an environment where they can engage in more intense discussions can be created."

Stonebridge Ventures also conducted several investments and exits last year. A representative exit was AI semiconductor company Open Edge Technology. Stonebridge Ventures invested in Open Edge Technology in 2018, making a total investment of 11.5 billion KRW over four rounds. The final exit amount was around 54 billion KRW, achieving a multiple of 4.7 times within five years of the initial investment.

He said, "Open Edge Technology was an investment where we led all investments from the initial discovery onward, and it is a memorable investment that involved all efforts and judgments of Stonebridge Ventures."

He also cited 'Todak,' a manufacturer of cochlear implants, as a meaningful investment case. Todak is a domestic company entering the cochlear implant market, which fewer than ten companies worldwide produce. In Korea, cochlear implants are entirely dependent on imports. He said, "When we decide to invest, we look at whether the company can bring innovation. Todak is believed to bring innovation to the cochlear implant market."

He also expects Todak to have a positive social impact. He emphasized, "Rather than simply recovering money through investment, there is an expectation that making products cheaper and distributing them to people with hearing difficulties will be more meaningful."

He also mentioned Enchem, which was invested in through a PE fund last year, as memorable. He said, "Enchem has quick responsiveness and decision-making ability, such as swiftly establishing local factories in line with clients' overseas investments," adding, "During the investor relations (IR) meeting, I heard plans that could threaten the world’s number one and decided to invest."

Yoo Seung-woon, CEO of Stonebridge Ventures. Photo by Stonebridge Ventures

"A Korean Wave of Technology Will Come... Focus on AI Solution Companies"

He identified three companies expected to perform well this year: IdeaHub (patent monetization), Onconic Therapeutics (improved new drugs), and AP Technology (food ingredients). Stonebridge Ventures holds significant stakes in all three.

IdeaHub is a patent management specialist company. It purchases patents from domestic and international companies or research institutes and asserts patent rights against companies worldwide to receive royalties (patent income). He explained, "IdeaHub is the only company in Korea that monetizes patent rights," adding, "It plays a role in enabling Korean companies, which were attacked by foreign companies, to respond on an equal footing."

Onconic Therapeutics is a subsidiary of Jeil Pharmaceutical. It develops various new drugs, including the reflux esophagitis treatment 'Zastaprazan.' Zastaprazan was also licensed to China in a deal worth 170 billion KRW. He said, "Zastaprazan has completed phase 3 clinical trials in Korea and is scheduled for market launch. This product will be a good cash cow," adding, "Although there have been only bad news about bio companies so far, if Onconic Therapeutics goes public, it can record a good market capitalization."

AP Technology develops manufacturing processes for human milk oligosaccharides found in breast milk and applies them to food, cosmetics, and pharmaceuticals. Its main product is 2'-FL, a rare sugar found only in human milk. It contributes to immune enhancement and brain development by suppressing inflammatory substance secretion and forming beneficial gut microbiomes. He emphasized, "AP Technology is the only company in the world producing 2'-FL," adding, "It has already signed contracts with French bio-food company Roquette Group and is showing results."

Despite the domestic VC industry's contraction, Stonebridge Ventures formed a fund worth about 240 billion KRW last year. Among them, a fund worth 182.5 billion KRW formed at the end of last year is expected to grow to 250 billion KRW by the first quarter of this year through multiple closings. He explained, "Stonebridge Ventures' consistent performance and steady communication seem to have been well received by LPs."

His area of interest is companies that have strengths in Korea and can expand globally?so-called technology Korean Wave. Among these, he has a high interest in companies possessing AI solutions. He emphasized, "Personally, I expect the Korean Wave to appear not only in culture but also in industry," adding, "AI solution companies specialized in Korea's large-scale advanced industries such as semiconductors and secondary batteries can be sufficiently recognized overseas, so we will discover related companies."