By Hyunjin Choi
LAC-Korea Startup Fund(Latin America and the Caribbean-Korea Startup Fund) with USD 50 million will be established for investing in Korean and Latin American startups.
Born2Global Centre(Chief Executive Director Jongkap Kim) announced on August 14th that the IDB Lab, an innovation lab of Inter-American Development Bank(IDB), will form a fund for LAC-Korea. The size of fund is estimated to start from a minimum of USD 50 million. Through this fund formation, Born2Global Centre(Born2Global) will serve as a bridge for Korean startups to enter the Latin American markets.
In particular, the fund is going to focus on startup investments from early stage to Series B. Considering the growth potential in the Latin American markets, the main investment areas are FinTech, EdTech, HealthTech, Wellness, Biotech, CreativeTech, AgTech, Cleantech, Marketplace, E-commerce, LogisticsTech, and Mobility. Investment targets include LAC-Korea joint ventures, Korean and LAC startups operating in, or planning to expand into LatAm and Korean markets.
According to the IDB Lab, the amount of investments in Latin America has been consistently increasing. In 2018, it marked USD 2 billion, doubling from USD 1.1 billion in the previous year. Investment execution count in LAC also increased by 86 percent (249 cases in 2017 to 463 cases in 2018). With this brisk pace of investments, the number of unicorns in LAC has reached 16 companies including Stone, Rappi, and Arco.
Startup investment status in Latin America
SoftBank, the Japanese multinational conglomerate, has actively jumped in LAC startup investment in March by creating an LAC fund worth USD 5 billion.
“The countries driving the current LAC startup investment ecosystem are Brazil, Mexico, Chile, Columbia, Argentina, and Peru. They are concentrating on local startups for finance, marketplace, logistics, distribution, shipping, agriculture, and education. Despite their effort to create an active startup ecosystem, they still lack in technological advanced startups. From a different point of view, the dearth of tech-based startups can be an opportunity for Korean startups to advance and mature in LAC regions, especially with this LAC-Korea Startup Fund,” said Mr. Jongkap Kim, the chief executive director of the Born2Global Centre.
“This fund is expected to play an important role as a driving force for startups to successfully enter the LAC region by multidisciplinary scaleups as well as giving a financial boost,” added Mr. Kim.
Born2Global Centre is planning to help Korean startups advance into LAC markets in addition to LAC startups to expand operations in the Korean market. It is going to sustain cooperative relations with IDB Lab and venture capitalists by sharing information and consultancy.
IDB is seeking a devoted General Partner(GP) for this LAC-Korea Startup Fund from both Korea and LAC regions. The selected GP will make all financial, legal, and operational decisions for the Fund and the successful candidate should be able to operate a global fund partnership between LAC and Korea. Proven experience with startup investing in LAC region and/or Korea will be preferred. Firms are encouraged to submit an Expression of Interest by September 23rd, 2019. Any inquiries can be accepted by email@example.com, firstname.lastname@example.org, email@example.com. The selection will be finalized by the end of the year.
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