Israeli venture capital to fund local start-ups
Published: 01 Sep. 2014, 20:51
The Israeli group is credited with rejuvenating the country’s economy after it suffered through high unemployment rates in the 1980s by nurturing venture capitals.
Through its campus in Korea, the group will form a fund worth 1 trillion won ($987 million) over the next three years, investing about 300 billion won each year in cooperation with its partners that participated in Israel’s Yozma Fund in 1993, a historic venture fund that transformed Israel into a start-up country.
That venture capital will come from various countries including the United States, Singapore and the United Kingdom.
Korea will be the first country where Yozma opens a start-up campus. The campus will give customized business education and hands-on training based on each start-up’s goals, as well as a lab for manufacturing prototypes.
The 606-square-meter (1,998-square-foot) campus will be located in Seoul, Incheon or Gyeonggi.
Local start-ups that specialize in big data and cyber security will be Yozma Group’s main focus. The investor hopes that the start-ups will eventually be acquired by global tech companies.
“I think Korea already has reached a more advanced technological level than its fellow Asian countries like Taiwan and China,” Yigal Erlich, founder and managing partner of Yozma Group, said in a statement yesterday. “Foreign investors like us think that the main reason that the Korean start-up market has stayed weak is not the technology. It is a problem of globalization.”
“[Foreign investors] certainly recognize the power of Korea, which nurtured global companies like Samsung and LG,” continued Erlich. “We think that the Yozma will be able to grow Korean start-ups into the second and third Samsung.”
Like its name, Yozma, which means initiative in Hebrew, the group hopes to take the initiative to bring global venture capitals’ attention to Korean start-ups that have high potential to succeed overseas.
Yozma Group hopes to help local start-ups build their business at home and overseas simultaneously, unlike existing success stories like Kakao and Line, which have gone abroad after success at home.
“After multiple visits to Korea, I saw that so many technology start-ups disappear because the country didn’t have enough experts who can evaluate the value of future technology,” Erlich said. “Also, I saw many Korean start-ups fail in the local market, mainly because they didn’t launch their products at the right time.”
The group said it will also open campuses in other parts of Asia, which will help connect Korea with large markets like China and emerging markets in Southeast Asia.
BY KIM JI-YOON[jiyoon.kim@joongang.co.kr]
with the Korea JoongAng Daily
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