While Others Turned to China, AJU IB Investment Chose Boston... 19 Portfolio Companies Listed on NASDAQ [In-Depth Look at Major VCs] ⑦

First Korean VC Enters Boston in 2013
Nineteen Portfolio Companies Listed on NASDAQ
Conversion to Silicon Valley Affiliate and Entry as LP in Japan
Established First Dedicated AC Division Among Major VCs This Year

Editor's NoteA record amount of capital is flowing into the venture investment market. As large government policy funds become fully operational, major venture capital (VC) firms are rapidly scaling up as well. However, simply having more money does not guarantee better investment performance. In this in-depth, 11-part series, we analyze the trends of the VC market and examine Korea's leading VC investors. We selected top houses by assets under management (AUM), excluding firms with a high proportion of private equity (PE). After providing an overview of the market, we take a close look at each firm's growth trajectory, representative portfolios, investment philosophy and decision-making structure, as well as their key people and organizational culture.

In 2013, as Korea’s venture investment sector was eyeing the Chinese market, one house quietly planted its flag in the heart of US bio-healthcare—Boston. To date, 19 companies from its portfolio have been listed on NASDAQ, with one recently achieving a tenfold multiple on exit. This firm is AJU IB Investment, the pioneer of Korea’s first-generation venture capital.

As of the second quarter of this year, AJU IB Investment manages 2.5485 trillion won in AUM, and its cumulative AUM stands at 3.9936 trillion won. The cumulative AUM of its VC business alone is 2.1554 trillion won, and it is actively managing 1.3983 trillion won in VC assets through 16 funds. AJU IB Investment has built a full-cycle investment pipeline that covers the entire venture and capital markets: from accelerating early-stage startups (AC), to providing full-scale growth funding as a VC, and leading mergers and acquisitions (M&A) for mature companies through private equity (PE). This allows the company to invest across all sectors.

2013: First Korean VC to Enter Boston...Expanding from Silicon Valley to Japan

AJU IB Investment was the first Korean VC to expand into Boston. At the time, most Korean VCs were flocking to China, drawn by abundant capital. Instead, AJU IB Investment focused on industries—not regions—anticipating that the bio-healthcare market would expand in an aging society. This led to the establishment of its Boston affiliate, Solasta Ventures.

Being the first Korean VC in Boston, it was not easy to independently source deals. At this stage, Solasta Ventures pursued a localization strategy led by Managing Director Dongmin Yoon. Yoon, who holds an MSF from Boston College, an MBA from Babson College, and experience in portfolio management at RBS Healthcare Banking Group and venture acceleration at Berwind Private Equity, assembled a local team and developed co-investment networks with global VC players like NEA, Novo Holdings, and Takeda Ventures. Solasta Ventures increased its portfolio by joining the deal flow of foreign VCs.

Drawing on its experience on the US East Coast, AJU IB Investment turned west. In 2019, it opened Solasta Nexus in Silicon Valley, converting it into a corporate entity as of June this year. While the Boston office focused on bio, the Silicon Valley branch is oriented around deep technologies such as artificial intelligence (AI), robotics, aerospace, and cloud computing. The lead of the Silicon Valley entity is Michael Jeon, who holds a bachelor’s in electrical engineering and computer sciences (EECS) from UC Berkeley, a master's in software engineering from Carnegie Mellon, and an MBA from MIT Sloan.

Last year, the firm also took part for the first time as a limited partner (LP) in Japan's VC market. Rather than direct investment in Japanese startups, it invested in local management company funds, thereby gaining exposure to their deal flow—a strategy similar to how the company initially expanded its portfolio through global co-investment networks in Boston.

'Seeing the "Sprout": Early Entry into SpaceX...Fivefold Return from Pearl Abyss'

One of the firm’s most prominent portfolio companies is SpaceX, founded by Elon Musk. In the Korean stock market, AJU IB Investment is regarded as a SpaceX-themed stock. Before SpaceX went public, the share price of AJU IB Investment stood at 3,340 won as of January 2, but, fueled by IPO expectations, soared to 18,700 won by April 28. After SpaceX’s IPO, when its stock price surged on the 13th of this month, AJU IB Investment's share price hit the upper limit, rising 29.89% in a single day.

In the biotech field, AJU IB Investment began divesting its stake in Arcellx after its listing on NASDAQ in 2023. It invested a total of 17.4 billion won, starting with the first investment in 2019 through Solasta Ventures, and recouped 167.5 billion won—a nearly 10-fold return. In particular, when global pharmaceutical giant Gilead Sciences announced in February that it would acquire Arcellx for $7.8 billion, Arcellx shares surged and the firm maximized its gains by disposing of its remaining shares. On February 20, Arcellx shares were priced at $64.11, but following the M&A news, they jumped to $113.75 on February 23, a rise of around 80%.

Other return highlights include a 5.7 billion won investment in Kymera Therapeutics that returned 64.1 billion won, and a 9.2 billion won investment in Atea Pharmaceuticals that yielded 92.5 billion won.

As for domestic returns, the company’s backing of Pearl Abyss—a game developer behind the MMORPG “Black Desert”—stands out. Since 2015, it has invested a total of 2 billion won in Pearl Abyss and recouped 11 billion won.

Selected as General Partner for National Growth Fund...Concerns over Nanoteam and Yanolja

The company has made its mark in government-backed policy funding as well. AJU IB Investment was selected as a sub-manager (GP) for the National Growth Fund’s small-cap indirect investment league, overseen by Shinhan Asset Management, and received funding of 43 billion won. With this, it plans to launch the 200 billion won “AJU Excellent Super Gap Scale-Up 2.0 Fund” in the second half of this year. Given that it has established six funds totaling 741.8 billion won over the past five years—averaging around 150 billion won per year—the launch of this new fund is expected to provide further momentum for its expansion.

This January, the company elevated its AC business group to the status of a central division and assigned dedicated early-stage investment professionals and government project consulting staff. Gyehoon Park, head of VC investments, took on the role of AC division chief as well. AJU IB Investment is the first major VC to establish a separate accelerator headquarters and prioritize early-stage investments in this way.

However, because it invests at every stage from startup inception through to post-IPO, the company may face a growing volume of high-quality but unexited assets. In particular, if a company’s share price falls after listing, exit schedules can be delayed. For example, Nanoteam—a company AJU IB Investment invested in back in 2019—went public in March 2023 at an issue price of 13,000 won, but as of the 20th of this month, its share price had dropped to just 5,270 won.

There are cases where IPOs have been delayed as well. Yanolja, in which AJU IB Investment invested in 2017, began its IPO push in 2020, but has yet to make visible progress. In 2021, SoftBank valued Yanolja at 8 trillion won.

CEO Kim Jiwon has led AJU IB Investment for more than ten years since being appointed in March 2015. The company continues its legacy as a first-generation house while also stabilizing its full-cycle investment system and strengthening its network of global outposts.

Kim stated, “As a first-generation VC, our strength in overcoming market fluctuations lies in the vast experience and expertise we’ve accumulated over many years,” adding, “Going forward, we will continue to deliver outstanding investment performance as a specialized alternative investment management company, while striving to maximize benefits for our limited partners and enhance value for our shareholders.”

<To be continued in the next issue>

This content was produced with the assistance of AI translation services.