Reinvented Softbank launches new all-Asia fund for AI startups

The venture capital arm of Japan’s SoftBank Group plans to establish within the year a new global investment fund to back promising AI startups in Asian countries other than China, according to SoftBank Ventures Asia CEO JP Lee.
“This new fund will look for globally disruptive startups with AI technologies and services in the Asia-Pacific (region), excluding China,” Lee said in a recent interview with The Korea Herald in Seoul.
As for China, a market that the Seoul-based SBVA is now prioritising, the VC will continue investing through the $300 million (Bt9.4 billion) China Venture Fund I launched last year in partnership with TPG Growth, a US-based private equity firm with a sizeable presence in Asia.
Today, many other investors and VCs are also on the hunt for so-called “AI startups,” a broad label considering the scope of AI technology. So exactly what kind of AI businesses is SBVA looking for?
“Any startup that fits the context of ‘AI for everything,’” Lee said, explaining that any startup that’s leveraging AI to build disruptive services is a potential candidate – whether it is operating in the field of health care, quantum production, sports, manufacturing or medical diagnostics.
“To elaborate, when we invest, we’re not focused on how sophisticated a startup’s AI technology is. Rather, we’re interested in its ability to build AI-based services that create tangible value, whether it is cost reduction or time savings.”
The amount of the envisioned investment fund, though not yet finalised, will hover around 300 billion won (Bt8.3 billion), according to SBVA. Right now, the VC is looking for partners who can run this Pan-Asian investment fund together.
SBVA’s plans to form a new region-wide fund come as the VC moves to increase investment in the broader Asia-Pacific area and gain a bigger regional presence.
Steering this shift is Lee, who has been acting CEO of SBVA since May 2018. A serial entrepreneur and a venture capitalist, Lee joined the SoftBank VC in 2015, discovering AI and media content startups through the Next Media Innovation Fund launched with Naver.
Prior to joining SBVA, he was one of the co-founders of Enswers, a video search technology company acquired by Tribune Media in 2015. During his undergraduate years at the Korea Advanced Institute of Science and Technology, he founded Evixar, a PC remote control software startup funded by SoftBank.
To reflect its broadened mandate, SBVA recently renamed itself SoftBank Ventures Asia, tossing away its old name, SoftBank Ventures Korea, which dated back to the company’s inception in 2000.
Though the switch may give the impression that SoftBank is relegating Korea to the back seat, that is not the case, said the SBVA CEO, who says Korea will continue to objectively remain a highly attractive market for investors in terms of investment opportunities and business potential.
“As we pivot to Asia, South Korea will not be marginalised. Korea remains an important market for us, and we plan to continually invest in promising startups here,” said Lee.
With Seoul, a major cosmopolitan city, and a population of ubiquitous smartphone users, Korea presents a good environment for “transformative” startups that can shake up the market order by using technology to upgrade or introduce new products, the CEO said.
Lee recognises that Korea is often seen as a limited market due to rigid regulations that prevent entrepreneurs from exploring new business models, particularly in fields such as mobility and finance. But once this changes, multibillion-dollar markets will be up for grabs for prepared players, he said.
A talent pool of highly trained product engineers with expertise in building market-competitive service products at companies such as Samsung, LG, Naver and Kakao is Korea’s best ammunition, he said.
“It’s IT engineers like those in Korea who can make competitive services that succeed not just in Korea but in global markets,” Lee said, praising the Naver-owned camera apps Snow and Zepeto as prime examples of globally popular services developed by Korean engineers.
SoftBank Ventures Asia is a wholly owned subsidiary of SoftBank Group and was established as SoftBank Ventures Korea in 2000. While it initially focused on the Korean market, the company has been increasingly investing in global markets since 2011.
With more than $1.1 billion currently under its belt, SoftBank Ventures Asia has so far invested in over 250 companies in 10 countries with a focus on AI, internet of things and robotics startups.
Notable investments globally include Tokopedia, a leading technology firm in Indonesia focused on commerce, logistics, payments and financial services; and Mythic, a fast-growing AI chip company based in Silicon Valley.
In Korea, SBVA is backing Hyperconnect, the operator of the video communication service Azar, which has achieved over 200 million downloads across 230 countries; and Snow China, the augmented-reality camera app with the largest number of users across Asia.