In May, the Korea Accelerator Association and Korea Early Stage Investors Association merged to form the Korea Startup Accelerator and Early Stage Investors Association. With the merging of the two associations, what vision and goals will they create and how will they cultivate the investment ecosystem? Hwa-Seong Jeon, the CEO of CNT Tech and the president of the Startup Accelerator and Early Stage Investors Association, and Byeong-Seon Lee , the director of the JCCEI, sat down to discuss the current state and future of the investment ecosystem.
Hwa-Seong Jeon, President, of the Korea Startup Accelerator and Early Stage Investors Association & Byeong-Seon Lee, Director of JCCEI
Driving the Ecosystem Forward with the Integration of the Two Associations
Byeong-Seon Lee Hello. First of all, congratulations on your appointment as president of the Startup Accelerator and Early Stage Investors Association. The merger of the Korea Accelerator Association and Korea Early Stage Investors Association is anticipated to generate greater synergy. It must not be an easy task to achieve integration beyond collaboration between the associations.
Hwa-Seong Jeon In February, I was appointed as the 4th president of the Korea Accelerator Association. Even before that, there have been calls for the integration of the two associations. As there are still many issues in Korea’s accelerator industry, there have been a lot of requests for us to work together. The merger was entirely based on this need. In addition, since I was part of both associations, the integration process was not too complicated.
Byeong-Seon Lee What will change because of the integration of the two associations? I’m also curious about the aims of the recently established Startup Accelerator and Early Stage Investors Association.
Hwa-Seong Jeon The most significant change is that we have enlarged the scope of accelerators. In preparation for the integration, we carefully contemplated whether to incorporate only those with accelerator licenses or also include CVCs (Corporate Venture Capital) and VCs (Venture Capital) that also perform accelerator functions. From a wider perspective, all participants are players in the accelerator industry, so it was collectively decided to work together. We have decided that starting next year, if it is related to ‘seed money investment’, ‘pre-A investment’ and ‘acceleration’, we will consider it as part of our industry. We are also striving to expand the mother fund and increase commissioned projects based on the expertise of accelerators.
Strengthening Global Presence through the Operation of Overseas Bases
Byeong-Seon Lee Recently, one of the major issues in the startup industry is global expansion. To expand the startup ecosystem, businesses need to go abroad, and accelerators play a vital role in this process. What preparations do the Startup Accelerator and Early Stage Investors Association make for the global expansion of startups?
Hwa-Seong Jeon The Startup Accelerator and Early Stage Investors Association is also making efforts in various ways for global expansion. One of the ways is operating local bases in countries such as China and Vietnam. We are assisting startups and member companies so that they can reduce the expenses and expand their networks when entering foreign markets. We are also interested in overseas startups that aim to enter Korea. I personally believe that inbound strategies are important in the age of population cliff. We also utilize each of the local bases to promote inbound strategies to overseas startups. We are promoting the professionalism and passion of the Korean VC ecosystem and the benefits of relocating headquarters to Korea. Last year, we were able to do a reverse flip of a Singaporean company, and we are currently working on TIPS. Recently, we have been reviewing a reverse flip of a Vietnamese startup as well.
CNT Tech, a leading accelerator in Korea
Byeong-Seon Lee Besides being the president of the Startup Accelerator and Early Stage Investors Association, you are also the CEO of CNT Tech. Particularly, CNT Tech holds the record for the most investments by an accelerator in Korea. I’d love to hear how you started the business and what contributed to its growth.
Hwa-Seong Jeon I think I’ve had an entrepreneurial spirit since I was a student. The company I started back then managed to exit on a small scale, and with those funds, I founded CNT Tech in 2003. We began as a B2B platform aimed at streamlining food orders. After participating in the ‘Go Venture Forum’ led by Chairman Young-ha Ko of the Korea Business Angels Association in 2012, many startups started asking for mentoring. The primary challenge was a lack of funding. In 2013, with a focus on mutual support, I made my first investment. Fortunately, after five years, I was able to retrieve an amount that was about 2.5 times the total investment. Back then, I was more interested in expanding overseas, and accelerating was just a minor task. With the outbreak of COVID-19 the following year and the overseas expansion being halted, we shifted our focus to accelerating. Last year, we invested in around 80 projects, and this year, we anticipate investing in more than 90 projects. It appears that we have reached this point by just putting in the effort.
Byeong-Seon Lee We look forward to seeing more successful investment and exit cases. Among the numerous startups you have invested in, which one stands out the most in your mind?
Hwa-Seong Jeon I would say, Cookat. CNT Tech initially invested in it in 2013. This startup manages food-based media channels, and in 2022, it was sold to GS Retail for 55 billion won and achieved an exit. I believe the secret to Cookat’s success is the humble attitude and efforts of its CEO, Moon-ju Lee. In business, you can face risks at any moment. Moon-ju Lee always stayed humble, even during rapid growth and tough times. From what I’ve seen, these are the people who usually end up being successful.
Byeong-Seon Lee A while ago, you held the ‘2024 C-Forum’, which brought together investors and entrepreneurs to share their experiences and insights. It gained attention as Young-ju Oh, the Minister of SMEs and Startups, was also present.
Hwa-Seong Jeon After hosting the first one last year, we collaborated with Chosunbiz to organize the second 2024 C-Forum in July of this year. This knowledge forum brought together government officials, startup founders, investors, and experts from the startup ecosystem to discuss ways to foster a healthy startup investment and revitalize the venture and startup ecosystem. We plan to continue this event annually.
Byeong-Seon Lee I think the reason behind your numerous accomplishments is your unique management philosophy as an entrepreneur.
Hwa-Seong Jeon The management philosophy of CNT Tech is ‘Business is people’. It is a saying by the famous merchant Sang-ok Lim of the late Joseon Dynasty. While we had to adjust our foodtech operations due to the COVID-19, we opted to train our existing workforce and set up a new accelerator organization rather than resorting to downsizing. I believe that when you put people first, the performance comes naturally.
The Future of Jeju Startup Ecosystem
Byeong-Seon Lee As an accelerator and investor in the startup ecosystem, what are your thoughts on the JCCEI as a builder of the local ecosystem?
Hwa-Seong Jeon The creation of innovation centers in every region of the country, linked to large companies or their subsidiaries, has led to many achievements. As public accelerators, they play a crucial role in the overall startup ecosystem, including investment, nurturing, and the creation of funds. They are important players in Korea’s startup ecosystem. Their role in the local startup ecosystem is particularly significant.
Byeong-Seon Lee Some people claim that creating and investing funds by innovation centers overlaps with the role of private accelerators.
Hwa-Seong Jeon I believe that there are more opportunities for the innovation centers and private accelerators as co-GP. The innovation centers are in the public sector, so it’s easy to use infrastructure and also have a network with large companies. Most innovation centers also view co-GPs positively.
Byeong-Seon Lee JCCEI has been striving to create a unique and innovative startup and investment ecosystem in Jeju over the past 10 years. I’m also interested in how you view the Jeju startup ecosystem.
Hwa-Seong Jeon Jeju has always been a place of interest for us, and we have been investing in companies like Haenyeo Kitchen, SGMA, Uh Shin, Air Deep, and Remedy for quite some time now. We would love to work with JCCEI as Co-GP if there’s a chance (laughs). We believe that companies in Jeju have a lot of potential for success. The unique environment, cultural content, and pristine nature only in Jeju provide great business models for startups. Being a company from Jeju gives a brand a positive image. I anticipate that there will be many promising startups emerging from Jeju in the future.
Byeong-Seon Lee Thank you for making time to speak with us, even though you have a busy schedule following the launch of Startup Accelerator and Early Stage Investors Association. Is there anything you would like to say to the entrepreneurs who are working tirelessly today?
Hwa-Seong Jeon I would like to say to the entrepreneurs in Jeju in particular. I have met many of them, and they are very passionate and dedicated. They have a strong entrepreneurial spirit, and I want to give a Bir applause to all the entrepreneurs in Jeju, not just the companies that we have invested in, but all of them, regardless of whether they have succeeded or failed. We will continue to back you up in the future.
