[In-Depth Look at Major VCs]⑪From Supporting Management to Acquiring Control... SBI Investment’s Full-Cycle Investment Journey

13 Years with CIS: From Acquiring Management Control to Exit
Algigenomics Jackpot: 4 Billion Won Invested, 78.1 Billion Won Returned
Back to Profit: Eliminating a 90 Billion Won Deficit
National Growth Fund Regional League GP: "Partnering w

Editor's NoteThere is a record amount of capital flowing into the venture investment market. As the government’s large-scale policy funds become fully operational, major venture capital (VC) firms are quickly scaling up as well. However, having more money and managing it well are two different things. This publication is conducting an in-depth analysis of trends in the VC market and the nation’s leading VCs over 11 installments. We have selected top houses by assets under management (AUM), excluding those with high private equity (PE) proportions. After an overview of the industry, we will examine each firm’s growth trajectory and key portfolios, investment philosophy and decision-making structure, as well as their core personnel and organizational culture.

SBI Investment recorded an accumulated deficit of 91 billion won in 2012. This was two years after Japan’s SBI Group took over management, and in that year alone, the net loss reached 28.2 billion won. Despite shouldering investment losses from the previous management, the company has maintained profitability every year except 2022, and as of the first half of this year, it reduced its deficit to 9.6 billion won. If they earn an additional 9.6 billion won in the second half, the company will erase its deficit after 14 years.

The core driver behind the reduction of the deficit to 9.6 billion won in the first half of this year was RNomics. A 4 billion won bet returned as 78.1 billion won after seven years. Starting with participation in RNomics’ Series A round in 2019, the company continued to make follow-on investments even during the investment cold wave of 2022. As a result, RNomics succeeded in completing a technology transfer deal with the global pharma giant Eli Lilly worth up to 1.9 trillion won in May last year, followed by a successful listing on KOSDAQ in December. After fully exiting this year, SBI Investment achieved a nearly 20-fold multiple.

Korea’s First Venture Capital in 1986...Cumulative AUM Grows to 3 Trillion Won

SBI Investment was originally called Korea Technology Investment. It launched in November 1986 with a capital of 2 billion won and the following year, established the country’s first venture investment partnership; in September 1989, it became the first venture capital firm to be listed on KOSDAQ. In 2010, following a management dispute, SBI Korea Holdings, the Korean holding company of Japan’s SBI Holdings, acquired the company and changed its name in March of the following year. SBI Korea Holdings owns a 43.61% stake.

Since then, the firm has invested in more than 1,000 startups, leading 222 of them to go public. As of July 31, the accumulated assets under management (AUM) stood at 3.03 trillion won, with 1.5354 trillion won currently being managed. Of this, VC assets account for 1.2405 trillion won.

Investment decisions go through a two-stage process. Discovered opportunities are first scrutinized for business viability and risk by the first Investment Review Committee. Then, the final investment decision is made at the second Investment Review Committee, attended by President Jae-kwang Ahn, head of investment operations, and head of the venture investment division. Mr. Ahn joined SBI Investment as an investment professional in 2010, became head of the venture investment division in 2020, and rose to CEO in 2023.

During this process, the company uses an “anonymous individual electronic voting” system facilitated by an in-house enterprise resource planning (ERP) platform. This ensures that each committee member can cast a vote based solely on conviction and expertise, free from hierarchical pressure or the tendency to follow superiors, which often occur in face-to-face meetings. According to SBI Investment, decisions are based on transparent data and open debate, regardless of organizational rank.

Although it does not have its own overseas branches, SBI Investment can leverage the global network of its parent company, Japan’s SBI Holdings, which has over 760 affiliates in 26 countries worldwide. As such, it can serve as a gateway for promising domestic startups seeking to expand globally.

13 Years From MBO to Exit...The Daegu CIS Case

SBI Investment’s involvement spans from the very early stages through scaling up, and if necessary, it acquires management control via private equity funds (PEF). Battery equipment specialist CIS is a prime example.

In 2011, when the CIS management team in Daegu sought to become principal owners by buying out the largest existing shareholder (through a management buyout, or MBO), SBI Investment made the initial investment in partnership with IMM Investment and LB Investment. Subsequently, the company proceeded with second and third investments, enabling CIS to proactively pursue battery equipment R&D and sales. CIS was listed on KONEX in 2015 and transferred to KOSDAQ through a SPAC merger in 2017. The funds invested via venture capital were retrieved in 2020.

That same year, as global battery manufacturers ramped up facility investments, CIS needed to expand its production capacity. Sales had grown from 26.1 billion won in 2017 to over 100 billion won in 2019. At this point, SBI Investment conducted a fourth investment using a PEF to acquire management control. In July of that year, the SBI New Growth Support PEF acquired 17.95% of the shares for 53.3 billion won, becoming the largest shareholder. In September, the SBI-STL Energy Innovation PEF—which SBI Investment formed jointly with ST Leaders PE—purchased additional existing shares and convertible bonds.

The exit for the PEF investment was not an IPO. In June 2022, SBI Investment put CIS up for sale, and in December of that year, SFA acquired CIS. Having invested a total of 100.6 billion won since 2011, SBI Investment recovered 183 billion won through 2024. SBI Investment’s 2015 investment in U.S. surgical robotics firm OSERLINE Health also exited with a 4-5 times return upon its sale to Johnson & Johnson.

Additionally, SBI Investment made three rounds of investment from Series B to pre-IPO in AI autonomous drone company Nearthlab. Nearthlab was successfully listed on KOSDAQ on July 24, raising expectations for future returns. Likewise, serial investments were made from Series A through Series B—completed in June this year—in Exyna, a next-generation memory semiconductor company. Exyna secured 20.18 billion won in that round, with its corporate value recognized at 800 billion won.

These exits translated into performance. Operating revenue in the first half of the year was 13.3 billion won, up 69.2% year-on-year, and operating profit stood at 7.6 billion won, an increase of 277.4%. Net profit for the period was 7.5 billion won, with management and performance fees totaling 7.7 billion won. The company cited both RNomics and NBR Motion, a precision bearing company in Miryang, Gyeongsangnam-do, as the drivers of performance improvement. SBI Investment had invested 9.5 billion won in NBR Motion in 2018 and held it for eight years, recouping 21 billion won through two exits after it went public.

Selected for the National Growth Fund's 'Regional League'...A Test Bed for Local Venture Scaling Up

SBI Investment’s next battlefield in the rapidly changing capital markets will be scaling up companies in non-metropolitan regions. In July, SBI Investment was finally selected as a delegated general partner (GP) in the regional league of the National Growth Fund. With 60 billion won in policy capital allocated by Korea Growth Investment Corporation, the firm plans to form a regionally specialized sub-fund with an expected size exceeding 100 billion won.

Boosting the value of regional companies is another SBI Investment hallmark. It provided funding to Green Optics, an optical equipment company in Cheongju, North Chungcheong Province, supporting its KOSDAQ listing last November. The company has also continued to invest in Yeonggwang YKMC, a surface treatment specialist in Asan, South Chungcheong Province, since 2020, leading to a preliminary KOSDAQ listing review last month. The company continues "socially-contributive regional investing" nationwide throughout South Chungcheong, Gangwon, Jeju, and other regions.

However, even after being appointed as a regional GP for the National Growth Fund, there are significant structural dilemmas to contend with. Regional venture funds face the challenge of a limited pool of non-metropolitan startups and are often concentrated in manufacturing and other specific sectors, making it difficult to achieve high returns. In addition, to fulfill regional investment quotas, a chronic issue is “nominal regional company” investing—where companies headquartered elsewhere open small regional offices or research labs purely to secure funding.

An SBI Investment representative said, “Through fund networks with regional Innovation Centers for Creative Economy and local governments, we are focusing investments in promising regional companies to foster local key industries. Rather than using regional location as the sole criterion, it is important to discover companies with strong business competitiveness and growth prospects that are linked to core local industries.”

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