[K-INVESTORS]⑦ CEO Jeong Il-bu "After Semiconductors and Batteries, Next is Bio"

"Talent Flowing into Bio Venture Companies After Medical School Graduation"
Early Investment Criteria: Industry Trends, Technology, Leadership
Discoveries Include Ecopro, Celltrion, Woowa Brothers, Krafton, Musinsa, and More

Editor's NoteThe Korean capital market is more turbulent than ever, driven by greed and selfishness. Market manipulation and foul play are rampant. However, many investors have carved out their own investment worlds and emerged as role models for individual investors, having endured various crises from the foreign exchange crisis, dot-com bubble, global financial crisis, to COVID-19. Through meetings with these investors, we aim to convey the value of money through their war-like stories of the capital market, their philosophies, failures, and successes. Starting now, we will share stories from experts across diverse fields, including the chief investment officers of domestic pension funds who have evolved into global 'big players' in value investing and activism, leaders of private equity and asset management firms, and CEOs of financial companies.

"I do not view the concentration of talent in medical schools negatively. The industries that will drive our economy next, after semiconductors and secondary batteries, are the bio and healthcare sectors."

Jung Il-bu is the Chief Investment Officer (CIO) of IMM Investment, the largest venture capital (VC) firm in Korea. He has discovered companies like EcoPro, Celltrion, Woowa Brothers (Baedal Minjok), Krafton, Musinsa, and Bucketplace (Ohouse) from their early stages.

"We currently see the three biggest pillars leading Korean industry as semiconductors, secondary batteries, and bio-healthcare. Semiconductors and secondary batteries already play a major role in driving the industry, and more excellent companies will continue to emerge. There is great expectation for fabless semiconductor companies. We have invested in notable companies such as Furiosa AI, Rebellion, and Mango Boost. Secondary batteries need no further explanation. Bio companies like Next BioMedical also have outstanding technology and are gaining global attention."

Medical School Concentration? Talent Also Flows into Bio Ventures

CEO Jung was the first investor to recognize EcoPro, a leading domestic secondary battery materials company. He paid attention and invested from the startup stage when no one else noticed. Subsequently, he invested comprehensively in the EcoPro group, including its holding company EcoPro, EcoPro BM, EcoPro Materials, and EcoPro Innovation. The same goes for Celltrion, to which he contributed significantly in reaching its current status. The success of Celltrion's investment helped imprint the IMM brand in the domestic capital market. With such a track record, CEO Jung is currently focusing on the bio-healthcare sector. This is an analytical forecast considering Korea's excellent talent pool, aging speed, and technological capabilities.

"These days, smart students prefer medical schools. People worry that the brightest students are flocking to medicine, but those who study medicine do not only become doctors; many also enter bio venture companies. We have invested heavily in such companies. The bio-healthcare industry is a growth engine. It suits Korea perfectly. First, the talent pool is excellent, and although R&D costs are high, it is a high value-added industry worth pursuing. It is not necessary to see the project through to the end to get results; technology can be licensed to global pharmaceutical companies mid-way, generating royalties. The fact that it is not capital-intensive is an advantage from an investment perspective. We also excel in Contract Development and Manufacturing Organization (CDMO) services, like Samsung Biologics and Celltrion. Although the technology is difficult, this business model fits well with Korea's environment. The accelerating aging population in Korea also makes it more appropriate than other countries to focus on and develop the bio-health industry."

CEO Jung also viewed the future of K-content optimistically. Although global online video streaming services (OTT) like Netflix and Disney Plus currently dominate content distribution, the power of K-content is growing stronger.

"I believe BTS has been the most powerful force imprinting Korea on the international stage. I see great strength in K-content. Currently, OTT companies preemptively secure contracts with excellent actors, writers, and directors and acquire broadcasting rights. However, in the future, we will be able to take the lead in broadcasting rights. Netflix finances productions and holds exclusive broadcasting rights for a certain period, after which the rights revert to us. In other words, it is expected to shift to a model where overseas capital is attracted to produce content, which is then exported. The leadership will shift toward K-content."

Focus on Industry Trends, Technological Capability, and Leadership

Since its launch in 1999, IMM Investment has invested in numerous companies. The combined value of the unicorn companies it has invested in exceeds 20 trillion won. What are CEO Jung's criteria for investment decisions in early-stage companies under three years old?

"Unless you are a fortune teller, it is difficult to pinpoint a choice. I first look at industry trends. Are these trends correct? Is the company led by someone with the ability and competence to succeed? Can they overcome difficulties? These are things you sense through conversations. I look at their career and background and ask many questions. You need to see who surrounds them. Leadership and competence attract talented people. There must be a belief like 'I can go all the way with this person.' Choosing investment companies cannot be decided by a single keyword. This is something artificial intelligence can never do. I observe and judge various factors."

Although interest in bio and content companies has increased, IMM no longer makes new investments in platform companies, judging that domestic platform companies have now all established their positions.

"The ship has sailed in platforms. Existing platforms are becoming even bigger. Look at portal companies. After Naver and Daum established themselves as the two giants, no one challenges them. Now, platform companies are ranked first or second in each field. They have overcome difficulties, received investments, spent on marketing to increase membership, enhanced services, and secured their positions. It is now difficult to create a new platform and succeed unless it offers very special services or know-how."

Developing Venture Ecosystem... K-Suppliers with Global Competitiveness

He views the domestic venture ecosystem positively. Unlike the past when ventures grew as subcontractors dependent on large corporations in a 'gap-jil' (power abuse) relationship, many independent tech companies with global competitiveness have emerged.

"I want to invest in tech companies with technological capabilities. These are venture tech companies centered on semiconductors, secondary batteries, and bio. In the past, venture companies were mainly manufacturers serving as subcontractors in the supply chains of Samsung Electronics and Hyundai Motors, but now they are companies with technology competitive in the global market. Companies that do not necessarily have to be under the control of large corporations are emerging. Of course, initially, products need to be used, so testing and supplying to Samsung Electronics and SK Hynix are necessary. But after some time and securing technology, they can acquire global customers. It is encouraging to see material, parts, equipment companies, and fabless companies creating high added value showing such competitiveness. For example, Mango Boost develops chips that enable efficient data center server operations and collaborates with Samsung Electronics. In the bio sector, Next BioMedical's internal organ hemostasis technology is world-class. Stopping bleeding inside the body is very difficult. Spraying gel in a spray form often has errors. This company's technology allows precise aiming and application, and the gel naturally dissolves and is absorbed over time. It is highly innovative and difficult to imitate. Such companies are emerging one after another."

He cited large-scale government-supported investments in early-stage companies as the biggest factor enabling the venture ecosystem to break free from dependence on large corporations. The 'liquidity party' lasting about ten years until strong tightening policies were implemented after COVID-19 laid the foundation for K-venture companies to grow in various directions. The strong government-driven push for early-stage company nurturing, which began during the Lee Myung-bak administration and continued through the Park Geun-hye and Moon Jae-in administrations, is now bearing fruit.

"Government contributions already account for 70%, and private investors only need to raise 30% to complete funds for early-stage company investments. This has dramatically increased investment in companies under three years old. Twenty years ago, receiving 1 billion won was considered a lot for an early-stage company, but now good companies receive 3 billion, 5 billion, or even up to 10 billion won. With that capital, they can hire better personnel, purchase equipment, and conduct R&D. They can compete shoulder to shoulder internationally. Because investment units are different, success is inevitable. Previously, ventures were anxious about being pressured by large corporations to lower prices and spent each quarter reducing production costs. Those days are largely gone. Overall, the venture ecosystem has improved significantly. Currently, over 1 trillion won is invested annually in ventures. This was unimaginable before."

Must Become Companies Investors Want to Invest In and VCs Startups Want to Receive Investment From

Of course, the strong tightening policies have negatively affected VCs and startups/venture companies. Many VCs are in a 'business suspended' state due to prolonged high interest rates and external negative factors like war.

"The current market environment is really tough. But being in a business suspended state is unacceptable. When IMM was a small company, was it idle? No. We carried company brochures rolled up in a ring binder every day to promote ourselves. When trying to create funds, we lost repeatedly in beauty contests (public bids to select entrusted operators) and barely succeeded once in a while. It is tough at first. At such times, you need to change your perspective. If there is an excellent company you want to invest in, think from that company's point of view. Which VC would an excellent company want to receive investment from? They would want to receive investment from a VC that supports and manages them well. After the first investment, they want a VC that can provide strong follow-on investments. They want a VC that does not abuse power and has strategies to help partners. Then you must strive to become such a VC. It is not simply about having money or not."

The most rewarding aspect of startup and venture investment is seeing invested companies grow into unicorns. He believes venture growth is essential for a country's economic development.

"When an invested company goes public and exits (investment recovery), and waves goodbye saying 'Thank you for helping us grow well,' it feels really good. That is the most rewarding part. The growth of venture companies is connected to Korea's economic growth. They are the protagonists of future industries. Contributing to that process is fulfilling and gives me professional pride. When moral hazard occurs in invested companies, I feel discouraged, but seeing our companies become smarter and armed with ideas gives me strength. I trust our young people. There is no need to view the concentration in medical schools negatively. The high value-added bio-healthcare sector will drive our industry in this low birthrate and aging society. Please watch and support us."

◇Jung Il-bu, CEO of IMM Investment=He joined Samsung Electronics in 1995 and worked in the semiconductor general planning team. While working at Samsung Electronics, he encountered venture capital by chance and joined it, contributing to the growth of startups. After working at Asia Investment, he settled at IMM Investment. He currently serves as the Chief Investment Officer (CIO) overseeing VC investments at IMM Investment. Even after more than 23 years in venture capital, he considers being a venture capitalist his true calling.

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