Seoul Venture Tour Brings Startups To NYC

In a flurry of activity dubbed the Seoul Venture Tour, a dozen South Korean startups recently descended on New York in the hopes of finding venture backers and others who could help them tap the U.S. markets.

After introductory presentations from four American service providers, Korean entrepreneurs Daniel Kweon and Sang-Hun Nam began shaking hands and making pitches at the presentation table for Teruten Inc., a company that sells digital rights management software to aid online file-sharing. “I hope to introduce our solution to the [U.S.] market and also look for some financing,” says Kweon, Teruten’s chief marketing officer.

Casey Kim, chief executive of Infrabasic LLC – the company that organized the tour – says these companies and many others already have products for sale in Korea and generate roughly $10 million in revenue each and want to grow by expanding into the U.S. and European markets.

“One of our core focuses in advising our client base is that if you want to make it in the global marketplace, you’ve got to move your headquarters to the United States where it is considered the global marketplace,” Kim explains. He tells companies to turn their Korean office into a research and development lab. “Bring all the marketing, management [and] investment-related professionals to the United States and hire the local CEOs and CTOs and CFOs to make it into a totally American-based corporation.”

According to data from Venture Economics (publisher of PE Week), U.S. investment interest in Korean startups has developed over the last few years. For 1996 and 1997, VE recorded virtually no American investors funding deals in Korea, but in 1999, U.S. firms invested $1.13 billion in 30 Korean startups. In 2000, 193 Korean startups received $716.8 million, and in 2001, 68 Korean companies received $525.9 million. Disbursement levels have dipped a bit this year, however, as U.S. investors have sent only $82.3 million across the Pacific through the end of the third quarter.

A Mirror In Israel?

Because the Korean economy and technology market have not been struck with all of the challenges facing their American counterparts, Kim says American investors can find an additional reserve of growing technology companies in Korea. He and other cross-border enthusiasts compare Korea to Israel. Koreans, like Israelis, live in a militarized state with close ties to the United States, and extensive military R&D programs have trained several generations of engineers and technicians.

Korea may be unique among other emerging markets simply because Americans are used to buying Korean products under their own labels: Samsung, Hyundia and LG, for example. Such conglomerates, called chaebols (rhymes with dribbles), dominate the Korean economy, but the government has tried spurring small and medium enterprises in the interest of economic balance.

The Seoul Venture Tour is one example of this type of governmental support. Seoul is the home to the largest concentration of startups, and its municipal government footed Infrabasic’s bill. The tour included Korean companies involved in a wide range of technologies from wireless to biotech.

Kim reports that a couple financial services technology companies, in particular, received high attention from the American corporations with which they met. But, he says it’s too early to know what will develop.

Contact Charles Fellers