Backed by S. Korean government, OurCrowd forms joint $80m fund for startup investment
The bilateral Israel-Korea venture fund will invest in 25-30 startups in both countries focused on semiconductors, robotics, automotive, digital health, and quantum computing
Sharon Wrobel is a tech reporter for The Times of Israel.
The South Korean government has teamed up with Jerusalem-based venture capital platform OurCrowd to create a $80 million fund for investment in startups in both countries.
The bilateral fund is planning to invest in 25 to 30 startups that develop technologies in key sectors, including semiconductors, robotics, automotive, digital health, and quantum computing. It has already raised $48 million from NH Venture Investment and K-Growth, the Korean partners of the jointly managed fund, formally known as the NH-OC Global Open Innovation fund.
K-Growth, a government agency handling investments by the Korean Ministry of Trade, Industry, and Energy (MOTIE) has committed $32 million for the fund, and NH Venture Investment, the venture arm of NongHyup Financial Group with total assets of more than $400 billion, has committed $16 million. OurCrowd, which manages over $2.3 billion in assets, stated that it is currently raising funds from its pool of over 240,000 registered investors worldwide.
OurCrowd CEO Jon Medved said that the “establishment of the Israel-Korea bilateral fund with the backing of the South Korean government is wonderful news for Israeli high-tech,” during a time when the country is more than eight months into a war with the Hamas terror group and many local startups are struggling to raise capital.
“South Korea is looking at Israeli innovation to establish its position in the industries of the future that it strives to lead by the end of the decade and beyond,” said Medved. “Apart from the fund’s investments, Israeli DeepTech companies will receive direct access to the South Korean industrial giants and will be able to forge collaborations on a global scale, including in the Asia-Pacific markets.”
“South Korean startups on the other hand will benefit by exposure to Israel’s deep global connections to leading venture capital investors, entrepreneurs and family offices which will accelerate their access to foreign tech innovation ecosystems and much needed capital,” he added.
Israel and Korea have long been touted as having synergistic qualities. Koreans specialize in the gradual growth of small and medium-sized companies into large corporations and use advanced technologies as a base to set up a complete production chain.
As the fifth-largest manufacturing power, South Korea is home to some of the world’s largest industrial manufacturing companies, with heavy industries like steel and shipbuilding and global consumer brands from automobiles to smartphones, including household names such as Hyundai, Kia, LG, and Samsung.
Israel’s tech ecosystem is a good place to create a startup around a groundbreaking idea and does well with improvisation and risk-taking during the most challenging times, but many local ventures face the central challenge of growing into large companies.
“K-Growth has established this fund to support the global expansion of Korean companies through open innovations with global high-tech enterprises such as innovative Israeli companies,” said NH Venture Investment CEO Kim Hyun Jin. “We expect to find Israeli innovation through OurCrowd’s extensive Israeli and global network, to collaborate with Korean high-tech startups to grow together through this fund.“
Israel and South Korea have a free-trade agreement (FTA) that came into force in December 2022 and is aimed at boosting bilateral trade and investment. The FTA, which eliminates tariffs on goods ranging from cars and medical equipment to lipstick and video games, is the first such pact between Israel and a country in Asia.
The FTA also includes measures to make trade easier in other areas, such as services, investment and standards.
