[In-Depth Look at Major VCs]⑩Performance Fees Jump from 140 Million to 26.5 Billion Won... Stonebridge Ventures Rides the Big Exit Cycle

140 Million Won in 2024, Soaring to 26.5 Billion Won in H1

65x Principal Return from "AI Model Optimization" Nota

NexEye and Others Awaiting IPO... 325 Billion Won AI Fund Also Launched

Editor's Note
An unprecedented amount of capital is being injected into the venture investment market. As the government's large-scale policy funds move into full operation, the scale of major venture capital (VC) firms is also rapidly expanding. However, raising money and managing it well are two different things. In this series, we conduct an in-depth analysis of trends in the VC market and major domestic VC firms over 11 installments. We have selected the top houses by assets under management (AUM), excluding those with a high proportion of private equity (PE). After reviewing the overall market, we examine each firm's growth trajectory, leading portfolio companies, investment philosophy and decision-making structure, as well as profiles of key individuals and organizational culture.

In 2024, Stonebridge Ventures recorded performance fees totaling 140 million won. While it was notable for earning performance fees despite a sluggish market, this figure paled in comparison to the previous year's 1.5 billion won. However, this "dry spell" in performance fees did not last long. As of the first half of this year, the number has surged to 26.5 billion won—12.9 billion won in the first quarter and 13.6 billion won in the second quarter. Of the operating revenue of 34.6 billion won for the first half, 77% came from performance fees. Operating profit reached 17 billion won, and net profit amounted to 14 billion won—both record highs for a half-year period. Compared to the same period last year, operating revenue has increased more than fourfold and operating profit more than sevenfold.

VC earnings are typically divided into management fees and performance fees. Management fees are annual payments received for managing a fund. At the fund's inception, the fee is around 2% of the total committed capital; after the investment period, it is calculated based on the remaining invested balance. Once the fund size is set, the inflow is generally predetermined. Performance fees are the portion—usually around 20% of the excess—taken by the management company when the fund's rate of return surpasses the benchmark agreed upon with limited partners (LPs).

The "jackpot" of 26.5 billion won in the first half of this year was created by a string of exits starting in the second half of last year. In the AI model optimization company Nota, Stonebridge Ventures received a multiple of 65 times its original investment; in the security company S2W, it achieved a return of 21 times. For the medical device company LiveSmed, which was listed in December of last year, the share was partially exited in a phased sell-down.

LiveSmed: 9 Years Later, a Long-Nurtured Portfolio Finally Pays Off

The companies exited this round spanned medical devices, AI, semiconductors, and optics. Stonebridge Ventures CEO Yoo Seungwoon commented, "Trends can pass more quickly or arrive later than expected," adding, "That's why we believe in building a broad and diverse portfolio, and we strive towards that goal." The investment team was also constructed with members from varied backgrounds, pairing one senior and one junior member as a team for each investment.

Stonebridge Ventures first invested in Nota in 2019, putting in 1.5 billion won on its own when the company had a valuation of 7.5 billion won, eventually increasing its total investment to 10.5 billion won over four rounds. Nota went public on KOSDAQ in November last year, with an offering price of 9,100 won. After listing, Stonebridge Ventures sold a portion of its shares, realizing a return of 65 times the original investment.

The story with LiveSmed is even longer. The initial investment was made in 2016 when the company was valued at 32.6 billion won, through four separate funds: the 2015 KIF-Stonebridge IT Specialist Fund, the Stonebridge Innovation Quarter Fund, the 2019 KIF-Stonebridge Innovation Technology Growth TCB Fund, and the Stonebridge DX Business Restructuring Fund. Just before IPO, Stonebridge Ventures held a 13.12% stake—the largest among financial investors (FIs). It took nine years from the initial investment to IPO. LiveSmed listed on KOSDAQ on December 24 last year with an enterprise value of 1.4 trillion won based on the offering price. In January of this year, Stonebridge Ventures sold 414,690 shares, recouping 2.4 billion won.

During the same period, Stonebridge Ventures realized a fivefold return from the optics company Green Optics. From OpenEdge Technology, a semiconductor IP company, it achieved a 4.7-fold return with a net IRR of 56.5% over five years. Machine vision company SUALAB, which was invested in back in 2014, was sold to Cognex of the US for about 230 billion won in 2019—this was an exit achieved via merger & acquisition (M&A), not IPO.

There are additional exits scheduled for the second half of the year. Ingenia Therapeutics was listed on KOSDAQ on the 18th, and Nearthlab followed on the 24th. NexEye and Adele filed for preliminary listing review with the Korea Exchange on the 22nd of the previous month, while Allganize filed for a listing review with the Tokyo Stock Exchange. Stonebridge Ventures also retains shares in Musinsa secured from its 2016 investment in StyleShare; Musinsa acquired StyleShare in 2021 and is currently preparing for an IPO.

Stonebridge Ventures continues its search for enterprises to lead future industries. Recently, it made pre-Series A investments in Solastic, a lightweight solar company, and Argos Identity, an AI-based identity verification platform. MangoBoost, an AI infrastructure company that received seed and Series A investment, is progressing smoothly as it collaborates with global semiconductor company AMD and prepares for a Series B funding round.

AUM of 1.7198 Trillion Won: Managing the Performance of a Listed Company Using Multi-Vintage Funds

In July, Stonebridge Ventures completed the formation of the "Stonebridge AI Global Investment Fund," totaling 325 billion won. For administrative convenience, this was structured as two parallel funds—one of 225.08 billion won and the other of 99.92 billion won—managed jointly. The main investment targets are all areas related to artificial intelligence (AI), including AI infrastructure, models, applications, and AI transformation (AX), which will account for 60% of capital allocation. Choi Dongyeol, who led previous investments and exits in LiveSmed, Nota, S2W, and Holiday Robotics, will serve as lead fund manager.

CEO Yoo said, "325 billion won is not a small scale, so rather than being biased toward any particular field, we are willing to invest in any company using AI to change the world. Although structured as parallel funds, when an investment is made in one company, both funds will invest proportionally to their respective sizes."

Including recently formed funds, as of the end of July, Stonebridge Ventures' assets under management (AUM) stood at 1.7198 trillion won, with cumulative AUM at 1.9553 trillion won. It also boasts a solid track record of liquidations: The Stonebridge Growth Stepping Stone Fund (liquidated in 2022) and the Future Creation Naver-Stonebridge Early-Stage Investment Fund (liquidated in 2021) achieved net IRRs of 37.90% and 33.30%, respectively. Aside from four out of ten funds, all have achieved double-digit net IRRs.

Beyond deal sourcing and fund formation, Stonebridge Ventures is making efforts to win shareholder trust through performance management. Since 2015, it has implemented a multi-vintage fund structure—establishing funds across different years—to ensure a steady flow of fund exits over time. Given that the average time from initial startup investment to IPO is 13 years and the average VC fund management term is 7 to 8 years, this approach addresses the inherent performance volatility of VCs depending on liquidation or exit timing.

"In general, we've been forming funds steadily at intervals of about a year and a half to two years," CEO Yoo remarked. "When building our portfolio, we also stagger investment to diversify exit schedules, ensuring a certain level of exits every year. We will continue building a stable base for exits to maintain predictable and healthy corporate practices."

<To be continued in the series>

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