In the past 10 years, Kim Ki-jun has been on the hunt for deep technology startups that will have a significant societal impact, and he will continue his mission as the new chief of Kakao Ventures Corp., the venture capital company under South Korea’s internet giant Kakao Corp.
“I support entrepreneurship pursuing fundamental changes in the world for the long term, not those chasing after quick fixes in profit models for the short-term profit,” Kim, the chief executive officer of Kakao Ventures, said in a recent interview with The Korea Economic Daily.
“I hope entrepreneurs should broaden their horizons, instead of focusing on easy, small returns.”
When application service was a buzzword in the venture capital industry in 2014, Kim shifted his attention to deep technologies, mainly machine learning and artificial intelligence, which were anticipated to reshape the future.
Since then, he has discovered a number of promising local startups in those areas, including Lunit Inc. developing AI-powered cancer detection solutions, fabless AI chip startup Rebellions Inc. and intelligent data discovery platform operator Select Star Inc.
AI-based chest X-ray software developed by Lunit Especially, he made a big bet on Lunit against disagreement from others, making Kakao Ventures the only seed investor for the startup and investing in it during six follow-up funding rounds in a row. Lunit is now a listed company.
Kim also uncovered Rebellions, one of Korea’s next unicorns valued at over $1 billion, even before the fabless AI chip startup was incorporated.
All these successful investments have proven Kim's good eye for future technologies that can bring breakthrough innovations to the world, leading Kakao Ventures to promote him to its head last month.
He is a perfect fit for the position as Kakao Ventures is a venture capital unearthing and investing in early stage startups.
The VC is one of the most preferred Korean investors among startups thanks to its generous support after initial funding.
DIP IN INVESTMENT
However, Kakao Ventures invested in 12 startups last year, the smallest investment since its inception in 2014, reflecting the prolonged funding drought in the startup industry.
The dip in its venture funding was largely attributed to the fall in the number of new startups, Kim said.
Kakao Ventures will focus on “both quantitative and qualitative methods” to identify promising entrepreneurs under his leadership, said Kim.
He thinks the current funding winter could be a chance for some startups because the unfavorable funding environment has kept many entrepreneurs away from entering the market, meaning less competition for early stage funding.
“If anyone dares to start a business in tough times, I want to advise them to focus on a big issue that must be tackled,” said Kim.
AI AND ROBOTICS ARE PROMISING
He foresees breakthrough innovations in AI and robotics if they are combined into one, like ChatGPT-powered serving robots making a huge difference to people’s daily lives.
Kakao Ventures meeting (Courtesy of Kakao Ventures) Kim compares AI development to human development. Like a baby whose cognitive development comes first before learning images and language, as well as walking, AI is now in its early development stages with robotics technologies.
“AI-powered robots can’t run or exercise now. They are in the early development stages of learning gestures,” said Kim. “It is time to look for startups (in the areas) that are ready to take their first steps.”
NO BLUE OCEAN IN IT SERVICE
Kim is, however, less enthusiastic about investment in informational technology services as he thinks the era to find a blue ocean in the market has ended.
He thinks a business model seeking to plant the flag first by transforming a web service into a mobile service is not an effective strategy any more.
“It is time to find new business opportunities from changes that can reshape the society, not time to stake a claim in a certain market,” Kim said. “Chances may lie in Korea’s demographic changes or influx of foreigners.”
