Startup Investment Cliff, 'Nakao' Becomes a Lifeline

Naver D2SF and Kakao Ventures
Drive Early Startup Growth
Supported Startups Enter Securities Market One After Another

The startup industry is on high alert amid the 'investment freeze.' Startups are struggling to secure funding due to the collapse of Silicon Valley Bank, which was a major financial source for startups as of last March, and the global economic downturn. In this context, Naver and Kakao are investing in domestic startups to help foster the growth of the startup ecosystem.

◆ Leveraging investments from Naver and Kakao to go public = CrowdWorks, a company providing AI training data construction services, was listed on the KOSDAQ market on the 31st of last month. It is the first startup invested in by Naver’s startup nurturing organization D2SF to successfully go public.

It has attracted attention by going public on KOSDAQ despite the recent market sentiment where investment psychology has significantly contracted. CrowdWorks succeeded in going public in a relatively short period of 6 years and 4 months since its founding. It is also the first domestic AI training data platform company to be listed.

CrowdWorks received seed investment from D2SF in its founding year, 2017. Since then, it has enhanced its competitiveness by collaborating with about 50 Naver organizations. Minwoo Park, CEO of CrowdWorks, said, “Naver is the only partner with whom we have maintained collaboration from the early growth stage to the present. The presence of Naver D2SF is absolute.”

Besides CrowdWorks, six other startups that received investments from D2SF are preparing to go public next year or the year after.

Companies invested in by Kakao’s subsidiary Kakao Ventures are also entering the securities market one after another. Last year, medical AI company Lunit, and this year, 4D imaging radar company SmartRadarSystem succeeded in going public. All of these companies received early-stage investments from Kakao Ventures, which helped their growth. Additionally, startups such as Shift Up and Standigm, invested in by Kakao Ventures, are expected to go public soon.

Nakao Has Fostered Over 200 Startups

Naver’s D2SF and Kakao Ventures have invested in more than 200 startups to date. Both companies plan to actively continue investing in startups this year as well.

Founded in 2012, Kakao Ventures has invested in over 170 startups to date, with cumulative investments reaching 320 billion KRW. Last year, it invested in 44 companies. It is particularly active in early-stage startup investments. Most investment firms tend to invest in startups that have grown to some extent to reduce risk. Kakao Ventures, however, is making investments that go against industry norms.

Launched in 2015, D2SF made its 100th investment at the end of last year. The combined corporate value of the invested companies has exceeded 4 trillion KRW. Notably, the survival rate of startups invested in by Naver is as high as 97%. The characteristic of D2SF is to identify growth potential early, invest, and continuously help startups enhance competitiveness by collaborating with Naver’s own services.

D2SF is recruiting startups to collaborate in the field of super-large AI until October. It plans to actively discover investment target startups across the entire super-large AI sector, including infrastructure startups such as AI semiconductors, data and model processing startups such as foundation models and AI lightweighting, and startups creating applications optimized for various industries using super-large AI.

This content was produced with the assistance of AI translation services.