ΆΓ  Japanese funds surging into Korean venture firms

Korea Herald 2000.12.23

Japanese venture capitalists and large companies are stepping up investments in Korean startups, industry watchers said yesterday.

They said funds from Japan are pouring into Korean business ventures and Internet startups in answer to pleas from local entrepreneurs, who have seen their expansion plans withering from the shortage of financing available in the local capital market.

As a result, Japanese investors can find good bargains in high-tech fields.

An Internet startup Digital FK was successful in attracting $3 million on Thursday from the Japanese venture capital firm JAFCO Co., an affiliate of the Nomura group.

Broadband Internet service provider Thrunet also received $250 million from the Japanese Softbank-managed "SB Thrunet Fund," on the same day.

Translation software developer Unisoft Co. attracted $3 billion from Japan's Sony Communication Network Corp.

Mitsubishi Corp. and three domestic financial institutions have invested $3.8 billion in personal digital assistant (PDA) manufacturer Cesscom Inc.

Japanese venture capitalists are paying close attention during investor orientation sessions set up by startups.

Six major venture capital business heads attended a session combining 12 local startups hosted at KTB Network Thursday.

Some companies brought their investment promotion sessions to Japan, and others are scheduled to follow.

On Sunday, Korea Management Association Consultants hosted an explanatory meeting for Korean startups at which some 20 Japanese venture capitalists attended.

Financial analysts say Japanese investors are trying to seize the opportunity that passed when the financial crisis hit Korea in late 1997.

At that time, foreign investors could have picked up local high tech investments at substantially reduced rates. Many feel the market's tumble in the second half has left several firms undervalued this time as well. (Yonhap)