Investors see safe haven in tech
A screenshot of the e-book publisher Ridi. The start-up announced Monday it secured 20 billion won (＄16 million) in funding from the Korea Development Bank, just six months after it secured 33 billion won from a venture capital firm. [RIDI]
E-book company Ridi announced Monday it has received a 20 billion won ($16 million) investment from the Korea Development Bank. The announcement comes on the heels of a local venture capital firm investing 33 billion won in the online publisher six months ago. Ridi is one of the few content companies to receive more than 10 billion won in investments and secured the first mega-investment to a single company from the state-run bank.
Ridi’s CEO Bae Ki-sik said the investments lay the groundwork for Ridi to experiment with new business ideas. The company took over the tech-focused news platform Outstanding in 2018 and the comics and cartoon platform Laftel in 2019.
The Korean Development Bank made the decision to invest in Ridi before the coronavirus began taking its toll on the country’s economy. While many venture capital investors have pulled back on investments, the bank opted to push forward with it, regarding content businesses as resilient to external factors like the pandemic.
Other start-ups which provide cloud, digital health care and other online services are also getting a boost from investors who see them as continuing to hold promise in a post-coronavirus world.
As the coronavirus forced workers to telecommute and students to take online classes, Microsoft said the use of its cloud services increased by more than sevenfold in areas where strict social distancing measures and self-isolation were in place.
Zoyi, which developed the business messenger service Channel Talk, secured a 5 billion won investment on March 17. The messenger app acts like an online cashier, allowing direct communication between consumers and business owners through their phones and laptops.
Analysts say the increase in e-commerce holds a bright future for cloud-based consumer service providers like Zoyi.
“Channel Talk fits the consumer trend of ‘untact services,’ since it allows consumers to take care of inquiries without interacting with the company in person,” said Michael Jang, investment manager at Zoyi and the director of KB Investment’s venture capital division. “Venture capital [investing] is looking for long-term bets. We try to look to the long run and invest in companies that have a strong business model.”
Digital health care is also increasingly catching the attention of investors.
They consider it especially promising after the government temporarily allowed remote medical services due to the coronavirus outbreak.
“The entire Korean population [comprises of] potential consumers of remote medical services and mental health-related services. Start-ups should use the coronavirus outbreak as an opportunity to set new rules, rather than being discouraged over government regulations,” said Choi Yoon-sup, managing partner of the venture capital firm Digital Healthcare Partners.
BY HA SUN-YOUNG [kang.jaeeun@joongnag.co.kr]
with the Korea JoongAng Daily
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