Naver to Raise Funds with Softbank to Nurture Content Creation Startups

South Korea's top Internet portal operator Naver Corp. and SoftBank Ventures, a venture capital firm under Japanese telecommunications giant SoftBank Corp., held a press conference at the D.CAMP in Yeoksam-dong, Seoul, on November 14 and announced to launch an investment fund worth 50 billion won (US$42.72 million) to nurture the growth of local content services.

Naver will invest 40 billion won (US$34.17 million) into the so-called "SB Next Media Innovation Fund, while SoftBank Ventures will put in anout 4.5 billion won (US$3.84 million). Korea Venture Investment will add 500 million won (US$427,169), with the remaining 5 billion won (US$4.27 million) to be collected from other foreign firms.

The fund will be invested in media and content creation startups that have secured virtual reality (VR) and augmented reality (AR) technologies as well as services linked to webtoons, videos and mobile games. Each firm which shows biggest growth potential in the global market will be provided 1 billion to 1.5 billion won (US$854,336 to 1.28 million).

Naver said in September that it would invest a total of 15 billion won (US$12.82 million) for three years – 5 billion won (US$4.27 million) per year, in five areas – web drama, web entertainment, beauty, kids and game. The company is actively investing in the content sector because content business is considered the next growth engine after its mobile messenger service “Line.”

The number of foreign users who use Naver Webtoon service more than once a month already exceeded that of domestic users. Foreign users account for more than 80 percent of live video streaming service V Live, while they account for 70 percent of mobile video messaging app Snow. An industry official said, “Businesses should target the North American and European markets with both mobile messaging services and content services.” 

At the press conference, all eyes were on the next movement of Snow. This is because global leading information technology (IT) companies, such as Facebook and Alibaba, recently showed their interest in acquiring Snow. Snow CEO Kim Chang-wook said, “Though it would be great to partner with such big companies, we are determined to successfully bring our service to global markets on our own.”

Meanwhile, Naver said that it will open its Grafolio Market, to any creators. The Grafolio Market is a platform which allows illustrators to digitalize and sell their contents. The company also announced at the press conference that it has opened “V Store,” which enables users to buy sticker items and special clips of celebrities, on the same day.