[Listed VC Analysis] ⑦ This Year Focused on AI Exits... 'Exit Specialist' Stonebridge Ventures

Krafton, Baedal Minjok, and Dunamu Deliver Multi-Fold 'Jackpot' Returns
SuaLab Sold to Cognex in the US... Diverse Exit Strategies
NewN.AI, Nota, S2W, and Japan's Allganize Prepare for Listings
'1 Trillion Won' LivesMed Also Pursuing IPO... Performance Rebound Expected

Editor's NoteThe Lee Jaemyung administration has shown a strong commitment to fostering venture businesses. Major deregulation and budget expansion are expected. Venture capital (VC) is drawing attention, as these firms are expected to play a key role in the upcoming process of nurturing ventures. In particular, listed VCs are in the spotlight. These listed VCs previously garnered intense investor interest by hitting all-time highs in 2021, when the venture budget surged. In response, Asia Economy is publishing a series that closely analyzes the strengths and core investment portfolios of major listed VCs.

Seungwoon Yoo Stonebridge Ventures CEO

All venture capital (VC) firms are feeling a sense of urgency and are eager to discover artificial intelligence (AI) companies. This is a move to join the AI boom as quickly as possible. Amid this trend, there are already VCs dreaming of exits. Stonebridge Ventures, which has surpassed 1 trillion won in assets under management, has become a major VC.

Stonebridge Ventures is a large, listed VC that focuses on deep tech and digital transformation (DX) investments. It has built trust with limited partners (LPs) based on its expertise and track record of exits. Over the past five years, the net internal rate of return (IRR) of its liquidated funds has been 27%, which is among the highest in the industry.

In particular, Stonebridge Ventures has achieved stable results by concentrating its investments on post-Series A stages rather than the seed stage. The company operates dedicated early-stage investment funds for multiple companies, then selectively makes follow-on investments through large-scale blind funds. In 2021, it also established its first secondary fund specializing in investments in existing shares of venture companies. A Stonebridge Ventures official explained, "The more deals the entire company can access, the better we can avoid fierce competition and secure investment opportunities with high growth potential."

‘Foresight’ in Identifying Companies with High Exit Potential

OpenEdge Technologies, which returned investment capital within five years, is cited as a recent successful exit case. Stonebridge Ventures began investing in this company, which provides integrated AI semiconductor design asset solutions, in 2018, injecting a total of 11.5 billion won over four rounds. One year after its listing on KOSDAQ, the company exited with 54 billion won in 2023. The total investment return was 4.7 times the principal, with an IRR of 56.5%. Going further back, there have been ‘jackpot’ returns of several dozen times, such as Krafton (28.3 times), Baedal Minjok (21.3 times), and Dunamu (49.0 times).

Stonebridge Ventures does not insist solely on IPOs. AI startup SuaLab was sold to Cognex in the US four years after investment, yielding nearly three times the principal. At that time, the IRR reached 105.79%. Despite the rarity of overseas companies acquiring Korean startups, the firm also achieved success by selling FoodFly and Ticket Monster to German and US companies, respectively. This demonstrates the company’s considerable ‘foresight’ in identifying companies with high exit potential.

Performance Slowed by IPO and Venture Market Downturn... Rebound Expected with Multiple Exits This Year

Even Stonebridge Ventures, which has recorded annual achievements, could not avoid the venture market downturn that began in 2023. Consolidated revenue, which was 29.6 billion won in 2022, shrank to 19 billion won in 2023 and 14.2 billion won in 2024, dropping to less than half. This was due to a sharp decline in equity-method gains, which reflect the performance of portfolio companies.

The company also fell short of expectations in carried interest, which pays a portion of excess returns when managed funds exceed the benchmark IRR. Carried interest was 12.2 billion won in 2022, but dropped sharply to 1.5 billion won in 2023 and 100 million won last year. However, management fees?monthly fees received for fund management?remained steady at 10.9 billion won in 2022, 10.1 billion won in 2023, and 11.1 billion won in 2024.

Stonebridge Ventures plans to make this year the starting point for a performance rebound, with full-scale exits underway. In particular, the company is on the verge of exiting major AI companies. This is the result of getting on board the AI boom earlier than other VCs.

NewN.AI (AI data analytics), which received pre-IPO investment, conducted institutional demand forecasting for its KOSDAQ listing and finalized its IPO price between June 12 and 18. Nota (AI model compression), which received its first investment in 2019, is undergoing preliminary KOSDAQ listing reviews, and S2W (AI security) has passed the review. Allganize, a Japanese startup invested in 2021 (AI platform), is aiming to list on the Japanese stock market by the end of this year.

In addition to AI, several other portfolio companies are also scheduled for exits. Medical device manufacturer LivesMed is considered the biggest ‘big fish.’ In early May, it filed for preliminary listing review with the KOSDAQ Market Division of the Korea Exchange. Stonebridge Ventures first invested in the company at its early stage in 2016, acquired existing shares, and injected capital over eight rounds to become the second-largest shareholder (14.6%). The company’s valuation at the time of the first investment was 30 billion won, but it is now valued at 1 trillion won in the market.

Patent management company IdeaHub also selected NH Investment & Securities as its lead underwriter in 2023 and is preparing for listing this year. The company secures patent rights from Korean conglomerates, mid-sized companies, research institutes, and universities, then expands patent filings or enhances technological value to receive patent royalties. It has been recognized as the largest private intellectual property (IP) specialist in Asia.