Two years ago, South Korea announced plans to achieve carbon neutrality by 2050. Getting there will be another story.
AAlthough Korean manufacturers say they are trying to change their ways, the country’s gross domestic product is tied to some particularly polluting industries, including petrochemical producers, automakers and shipbuilders. Although some businesses may not be truly sustainable, a venture firm in Seoul argues that climate-tech startups can help big manufacturers do better overall.
Sopoong, a social impact-focused VC, plans to support environmentally-focused tech startups in South Korea and Southeast Asia, building a bridge between Korean conglomerates and startups in the sector. Sopoong recently closed its sixth fund of $8 million (10.3 billion won), bringing the company’s total assets under management to $22 million (28 billion won).
I spoke to Sopuong CEO Max Sang-yop Han, a serial entrepreneur who joined Sopuong in 2016 and acquired the firm in 2019, to learn about his VC plans.
“It’s a great sign for large South Korean corporations like us who are involved with limited partners in environmental and climate technology-oriented businesses,” Han said. “Participating LPs [Korean conglomerates] Passionate about climate technology and agree that the climate crisis is one of the most urgent problems, they want to be involved in solving climate and environmental problems.
Korean petroleum refining company GS Holdings and chemical company Esu participated as limited partners in Soppung’s climate-focused fund until April, which Han said will become strategic partners for Soppung. Non-profit organizations such as the Asan Nanum Foundation and D.Camp, founded by Hyundai Group, as well as startup founders and executives, including Crafton co-founder and former CEO Gang-Seok Kim, have joined the Sopong Climate Fund. Han continued.
The early stage VC has already established five social impact funds and backed 81 startups as of 2020, after Han acquired the firm in December 2019. Sopoong was launched in 2008 by South Korea’s largest internet portal operator, Daum Communication, which merged with Kakao in 2014.
Now, the VC firm wants to zero in on the climate crisis and other environmental issues with its sixth fund, but other tech sectors like SaaS and IT are still on its radar, Hahn said. “Two-thirds of the fund will be invested in environmental and climate technology, renewable energy, agri-tech and food technology, and the rest will go into information technology industry investment,” Han said.
Its sweet spot is early-stages from seed to Series A levels around South Korea and Southeast Asia. The average check size is $150,000, but the firm can go as high as $600,000, Hahn told TechCrunch.
The sixth fund has invested in 16 startups, including MetaTexture, a plant-based food startup. Celex, a Vietnam-based electric scooter and battery swapping technology startup; Myorange, a platform for managing charitable donations; and Task 12, an automation tool that helps users complete code and design files.
Nine of the 16 portfolio companies will participate in Sopong’s first accelerator program, which began in June and will last for six months. Sopuong invests up to $350,000 in each startup through an accelerator program and provides mentorship, work space, management support and opportunities to network with experts.
On top of the momentum, the organization has launched a six-month collaborative program to foster climate technology entrepreneurship. So far, Sopuong said, he has selected 13 individuals with master’s or doctoral degrees to receive $1,700 per month in grants and other support related to the environment, including the accelerator program. If the participating colleagues succeed in establishing a startup, Sopong may make a seed investment, Han said.