[VC Now](18) Murex Partners "Vertical AI, New Opportunities for Startups"

"Focused Investment in a Few Startups is Important"
"It's Not Too Late for AI Investment...
Focus on Industry-Specific Service Innovation"

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 various investment firms, from large-scale VCs with accumulated experience and know-how to emerging VCs, to hear about their investment strategies and stories.

"It is true that Korea is lagging behind in the global artificial intelligence (AI) competition when it comes to hardware alone, but it has a tremendous strength in the market creating 'vertical AI' services."

Kang Dong-min, CEO of Murex Partners, is being interviewed by Asia Economy at the office in Gangnam-gu, Seoul. Photo by Jo Yong-jun

Recently, Kang Dong-min, CEO of Murex Partners, whom we met at their office in Gangnam-gu, Seoul, answered this way when asked about "Korea's AI competitiveness." He said, "Even if the smartphone hardware competitiveness is low, there are definitely countries that make a living by developing excellent mobile applications (apps). AI investment has so far focused on hardware infrastructure. You can find growth opportunities for startups in 'vertical AI,' which creates service models utilizing AI in specific industries."

"Focused Investment in a Few Startups is Important"

Kang began his investment career in 2007 at Hyundai Securities (now KB Securities) in the proprietary investment team. While working on venture investment and limited partner (LP) operations at the securities firm, he moved to a VC in 2014, and in 2017, he co-founded Murex Partners with CEO Lee Beom-seok. Currently, Lee is in charge of the private equity fund (PEF) division, and Kang oversees the VC division. Active collaboration between the two divisions occurs during mergers and acquisitions (M&A) and startup investor relations (IR) stages.

Murex Partners' slogan is 'Reinvent VC.' Kang said, "The startup ecosystem is very advanced, but I thought the Korean VC culture was stagnant. Foreign VCs encourage startups to become unicorns (unlisted startups valued at over 1 trillion won) and expand into global markets. In contrast, many domestic VCs prioritize startups' KOSDAQ listings, which I found regrettable."

The main investment strategy is "focused investment in a few startups." Murex Partners avoids "spray and pray" investment. Spray and pray refers to a strategy where VCs invest small amounts in many companies to support as many startups as possible. Kang emphasized, "VCs must trust startup founders, and the extent of that trust determines the startup's life and business scale. In fact, 70% of our portfolio companies are those we have led investments in directly. By focusing on a few startups, we have maximized corporate value."

Office view of Murex Partners. Photo by Jo Yong-jun

"It's Not Too Late for AI Investment... Focus on Industry-Specific Service Innovation"

Murex Partners has grown into a VC managing 400 billion won in assets under management (AUM) as of last year, seven years after its launch. Currently, it operates a total of 10 funds. This year, it plans to focus on 'vertical AI' by raising new funds centered on early-stage AI company investments. Vertical AI refers to customized AI services specialized in specific fields such as travel, insurance, healthcare, law, and autonomous driving.

Kang said, "Some view the AI market as overheated, but in reality, investment has been concentrated on AI hardware infrastructure. Korea's AI support direction mainly targets data center establishment, securing graphics processing units (GPUs), and creating large language models (LLMs). However, the area where we can truly excel is the layer built on top of that. Government support for vertical AI should be further strengthened."

He added, "We will invest not simply in startups with famous AI experts but in those that can practically create business value by utilizing AI, such as replacing specialized personnel in specific industries or maximizing labor cost efficiency."

Kang Dong-min, CEO of Murex Partners, is being interviewed by Asia Economy at the Gangnam-gu office. Photo by Jo Yong-jun

Last year, Murex Partners invested 5 billion won each in Habit Factory and ShopLive. Founded in 2016, Habit Factory operates 'Signal Planner,' a non-face-to-face insurance consultation app that compares various insurance products using AI. Its productivity is nearly ten times that of general offline insurance agents, and the cancellation rate of insurance sold through it is only one-tenth. Since launching the service in 2019, the cumulative number of users exceeded one million last year.

ShopLive, an AI video commerce software-as-a-service (SaaS) startup, provides solutions that allow clients to easily operate short-form (short video) commerce on websites and mobile apps. Beyond simple video streaming, it uses AI to automatically create short-form videos. Headquartered in Singapore targeting the global market, its domestic branch mainly consists of the development team. Since its establishment in 2020, it has surpassed 100 cumulative clients in four years.

Kang also paid attention to the dynamism of young founders. He said, "Every time a new IT wave emerges, the generation of founders changes, and the VC landscape shifts. The mobile ecosystem was mostly led by founders born in the 1980s, but the AI market will be led by founders born in the 1990s."

Furthermore, he added, "I disagree with the opinion that there are no good founders in the market. The startup ecosystem is much better than ten years ago, and there are many good startups in the market. Today's founders have heard the word 'unicorn' since their school days, so they are a generation that can dream of entrepreneurship rather than civil service exams. Now, as the AI service market is opening in earnest, this is a decisive time for startup investment."

iPod Touch components displayed at the Murex Partners office on Dosan-daero, Gangnam-gu. The purpose is to emphasize 'innovation' in the startup ecosystem. Photo by Jo Yongjun