Heo Yoon-hyuk, head of private equity investment at Korea Investment Corporation (KIC), stated on the 7th that global venture investment trends can be summarized as 'top venture capital firms investing in hectocorns (unlisted companies valued at $100 billion or more),' emphasizing that KIC will contribute to activating the domestic ecosystem through collaboration with Korea Venture Investment Corporation (KVIC). Heo made these remarks as a presenter at the 'Korea Investment Corporation-Korea Venture Investment Corporation Collaboration Forum' held at the National Assembly Members' Hall, saying 'the venture investment paradigm is changing.' KIC and KVIC signed a memorandum of understanding (MOU) on the 30th of last month with the goal of globalizing the domestic venture investment ecosystem and fostering unicorn companies, and the forum discussed specific details of the previously announced MOU.
Heo Yoon-hyuk Outlines VC Paradigm Evolution from Unicorns to Hectocorns
Heo stated, 'From the 1990s to the early 2010s, it was the era of creating unicorns (unlisted companies valued at $1 billion or more). Because it was centered on software and internet business models, rapid expansion was possible with small capital,' adding 'investing at $100-300 million valuations and exiting at $1 billion or more was typical.'
He explained that after going through the era of decacorns (unlisted companies valued at $10 billion or more) from the mid-2010s to 2021, capital-intensive business models like artificial intelligence (AI), deep tech, and infrastructure have now become central.
Heo stated, 'The picture has become investing at $10-30 billion valuations and exiting at $100 billion or more,' revealing 'VC's battleground has shifted from discovering multiple unicorns in the past to securing investment opportunities in a small number of dominant companies and qualitative due diligence.'
Five Startups Captured 73% of Q1 North American VC Investment
In the first quarter of this year, five startups including OpenAI, Anthropic, and Waymo attracted 73% of total investment in the North American venture investment market, and five VCs received 73% of institutional investor (LP) funding.
Heo explained, 'A structure has formed where capital concentrates on a small number of winner startups and a small number of large VCs that can access them,' stating 'relationships with and access to excellent VCs are the core competitive advantage.'
US VC Identifies Korea's Global Investment Position Challenge
Heo pointed out, citing what he heard from a large US VC, that compared to China, which has technology capabilities comparable to the United States, or India, which has excellent growth potential, Korea is not recognized as a major investment target country from a global perspective.
KIC and KVIC Propose Joint IR and Overseas Co-Investment Methods
Heo stated he will contribute to globalizing the domestic venture investment ecosystem and fostering unicorn companies through collaboration with KVIC, which operates the Fund of Funds.
As specific methodologies, he proposed promoting joint IR (investor relations) for next-generation unicorn companies, exploring overseas co-investment opportunities, and expanding networking.
Heo said, 'If KVIC selects unicorns, KIC will promote IR of those companies to overseas VCs,' stating 'both institutions will jointly review excellent investment opportunities to broaden the base of Korean investment institutions.'
While KIC's domestic investment is legally restricted, the plan is to connect domestic promising companies with overseas investors and enhance the investment capabilities of domestic VCs.
Yoon Hyo-hwan, head of KVIC's Global Division, who presented before Heo, emphasized, 'Through institutional synergy, we aim to perform a global bridge role so that overseas capital and networks lead to excellent domestic venture companies.'
Government and Institutions Commit to Scale-Up Support Measures
Son Sun-young, director of the Foreign Exchange Analysis Division at the Ministry of Economy and Finance, who participated as a discussant, said, 'The government and KIC will continue to devise various methods by maximizing available means for scale-up and overseas expansion.'
FAQ
What did KIC's Heo Yoon-hyuk emphasize at the forum on the 7th?
Heo Yoon-hyuk, head of private equity investment at Korea Investment Corporation (KIC), emphasized on the 7th that global venture investment trends can be summarized as 'top venture capital firms investing in hectocorns (unlisted companies valued at $100 billion or more).' He stated that KIC will contribute to activating the domestic ecosystem through collaboration with Korea Venture Investment Corporation (KVIC), which signed an MOU on the 30th of last month.
What specific data did Heo present about Q1 North American VC market concentration?
Heo presented that in the first quarter of this year, five startups including OpenAI, Anthropic, and Waymo attracted 73% of total investment in the North American venture investment market, and five venture capital firms received 73% of institutional investor (LP) funding. He explained this demonstrates a structure where capital concentrates on a small number of winner startups and large VCs that can access them.
What collaboration methods did KIC and KVIC propose?
KIC and KVIC proposed three specific collaboration methods: promoting joint IR (investor relations) for next-generation unicorn companies selected by KVIC to overseas VCs, jointly reviewing excellent overseas co-investment opportunities, and expanding networking. Heo stated that if KVIC selects unicorns, KIC will promote IR of those companies to overseas venture capital firms to broaden the base of Korean investment institutions.
