Foreign venture capital firms eye Korea

The trend among Asian and European venture capital firms to invest in up-and-coming Korean venture companies has picked up speed and is raising considerable interest as the domestic venture sector is experiencing a severe credit crunch.

The Korean Venture Capital Association revealed that Australian, Taiwanese, Singaporean and other Southeast Asian venture capital firms interested in investing in Korean organizations recently requested a briefing on domestic companies at an international conference held in Hong Kong. Domestic venture firms in attendance stated that despite the nation¡¯s world-class technology, the depressed financing market is making it tough for firms to procure funds. In response, local authorities have pledged to make proactive efforts.

In particular, venture capital associations from various nations have decided to formulate details for cooperation among venture capital firms in the Asia Pacific region. An Asia-Pacific regional alliance of venture capital firms will be established on Dec. 15 and will focus on cooperative activities in relation to investment and mutual benefits. European and Korean venture capital related organizations will also discuss cooperative matters within this week. The European venture capital firm association has already informed the Korean side of a plan to proactively exchange information between nations through making visits.

An official from the Korean venture capital association asked whether a company would invest into a certain venture firm that retains both technology and market ability. He also mentioned his keen interest in the growth of the venture markets and their funding situation. In this regard, Korean venture capital firms are setting up plans to counter the influx of foreign funds. KTB Network is considering making joint investments with foreign capital in order to distribute risk and return.

President Lee Soon-Hak of Hansol Venture Capital forecast that the local funding market will thaw as more foreign investors enter Korea due to their belief that the Korean venture market bubble has burst.