Holding Companies to Be Allowed to Set up CVCs
Large business groups, including Samsung, Hyundai Motor, and Lotte, have tripled their investment in venture companies in 2021 through their venture capital arms. Starting from Dec. 30, holding companies will be allowed to set up their venture capital companies. About 10 business groups including LG, GS and SK, are moving to directly invest in venture companies.
Samsung, Lotte, Hyundai Motor, and Kolon groups have their own venture capital firms as affiliates. They created new venture funds worth 500 billion won in 2021, more than three times the 165.2 billion won they invested in 2020.
Samsung Venture Investment established three new funds in 2021 and raised 180 billion won. The limited partners (LPs) of the funds are all Samsung affiliates. Lotte Ventures raised a total of 120.2 billion won. It established five funds and attracted investment from Lotte Chemical and Lotte Shopping.
Hyundai Motor established its second Zero1ne fund worth 74.5 billion won in 2021, attracting investment from its affiliates. Kolon Investment also formed the Kolon 2021 Innovation Investment Association worth 121.5 billion won. Venture capital firms of Samsung, Lotte, Hyundai Motor and Kolon plan to concentrate their funds on future technologies such as artificial intelligence (AI), eco-friendly cars, hydrogen, and system semiconductors.
Venture investment by large companies is expected to expand further in 2022 as general holding companies will be allowed to have corporate venture capital (CVC) firms as affiliates.