Firm links start-ups, traditional manufacturers
Concerns among start-ups and older companies associated with the industry are heightening as young job seekers are not showing interest, even while companies are in desperate need of new ideas.
In order to solve these problems, Choi Young-chan recently established a venture capital firm named Lighthouse Combined Investment in March, which is intended to connect potential start-ups with older manufacturing companies.
In July, Korea Development Bank and 15 Lighthouse partners based in Busan, Ulsan and North Gyeongsang jointly invested to create a 41.3 billion won ($37.6 million) fund. It is known to be the first fund jointly invested in by midsize companies.
“Kiseong Cable, a No. 1 company in equipment wires; Chokwang Paint, a No. 1 company in UV painting; and Hyundai RB, a No. 1 company in industrial piping, have participated in the fund, among others,” Choi said in a recent interview with the JoongAng Ilbo at his Ulsan office. These companies are mostly in their second or third generation of company managers.
Choi is also the first son of the ship-engine maker, Sunbo Industries’ founder, Choi Keum-shik.
“It takes quite a long time for start-ups or venture companies to show tangible results,” Choi said. “Second or third-generation owners are suitable to make investments in that sense, because they have an objective viewpoint of business based on their experience and networks, built through their parents’ companies.”
JoongAng Ilbo was able to meet Cho In-ho, head of the car transmission auto parts maker Neonent, and Kang Hyun-suk, head of Hyundai Industrials, both of whom have participated in the Lighthouse funding.
Cho said young job seekers these days are more willing to work as parking assistants at department stores than for traditional manufacturing companies, even if they are paid much less.
“It was a serious concern for us to seek ways to survive in the traditional manufacturing industry for the next 20 or 30 years,” Cho said, “while a lot of people try to shun it as much as possible.”
“Professional investors at Lighthouse inform us about new start-ups with potential once a month,” Cho added, “so we can invest efficiently.”
Lighthouse currently has offices in Seoul, Busan, Ulsan and Gwangju. It divides its investment fund into start-ups that can boost the value of traditional manufacturers and those in a completely new industry such as fintech or IoT.
“We want to make an ecosystem of our own that connects the industry built around the southeast of the country [where traditional manufacturing companies are concentrated] with start-ups built around Seoul and the finance industry that’s centered in the Yeouido area.”
Cho added, “Generally, 60 to 70 percent of the investment funds created at venture capitals are sourced from the government. But for us, it is mostly sourced from partner midsize companies that allow us to make meaningful investments, whereas the old method tended to lead to hasty investments to see tangible outcomes quickly.”
Lighthouse made its first investment in November in the display manufacturer Livicon, which makes the so-called PDLCD panel that becomes transparent if supplied with power. They are installed in Lotte World Tower’s observatory.
BY CHOI EUN-KYUNG [email@example.com]
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