Two years ago, South Korea revealed a plan to be carbon neutral by 2050. The road to it is a different story.
AWhile Korean manufacturers say they are trying to change their ways, the country’s GDP is linked to some uniquely polluting industries, including petrochemical producers, automakers and shipbuilders. although some companies may never be truly sustainable, a enterprise Seoul argues that emerging climate tech startups will help major manufacturers do better overall.
Sopoong, a social impact-focused VC, plans to support environmentally conscious tech founders in South Korea and Southeast Asia while building a bridge between Korean conglomerates and industry startups. Sopoong has closed about $8 million (10.3 billion won) for its latest, sixth fund, bringing the company’s total assets under management to about $22 million (28 billion won).
I spoke with the CEO of Sopoong Max Sang Yeop Hana serial entrepreneur who joined Sopoong in 2016 and took over the company in 2019, to learn more about the VC’s plans.
“It’s an important signal for large South Korean companies that participate as limited partners in environmental and climate technology-focused venture capital funds like us,” Han said. “Participating LPs [Korean conglomerates] are passionate about climate technology and want to participate to tackle the climate and environmental problem as they agree that the climate crisis is one of the pressing problems.”
Korean petroleum refining company GS Holdings and chemical company isu participated in Sopoong’s climate-focused fund as limited partners from April, Han said, adding that they will be more like Sopoong’s strategic partners. Non-profit organizations such as Asan Nanum Foundationfounded by Hyundai Group, and D.Campas well as startup founders and executives, including the co-founder and former CEO of Krafton, Gang Seok Kimalso joined Sopoong’s climate fund, Han continued.
The early-stage VC had already set up five social impact funds and supported 81 startups since 2020, after Han acquired the company in December 2019. Sopoong was launched in 2008 by Jaewoong Leewho co-founded Daum Communication, South Korea’s largest internet portal operator, which merged with Kakao in 2014.
Now the VC firm wants to focus on the climate crisis and other environmental issues through its sixth fund, but other tech sectors like SaaS and IT will still be on the radar, according to Han. “Two-thirds of the fund will be invested in environmental and climate technology, including renewable energy, agritech and food technology, with the remainder going to investments in the information technology industry,” said Han.
The sweet spot is early-stage ventures from start-up to Series A stages in South Korea and Southeast Asia. The average check size is $150,000, but the company can go up to $600,000, Han told ukbusinessupdates.com.
The sixth fund has already invested in 16 startups, including Metatexturea plant-based food startup; Selexa Vietnam-based electric scooter and battery swap technology startup; Mine orange, a platform for managing charitable donations; and Feature 12an automation tool that allows users to complete coding and design files.
Nine of the 16 portfolio companies are participating in Sopoong’s first accelerator program, which started in June and will run for six months. Sopoong invests up to $350,000 in each startup through the accelerator program, providing mentorship, co-working space, administrative support, and networking opportunities with experts.
In addition to the accelerator, the company also launched a six-month fellowship program to encourage entrepreneurship in climate technology. Sopoong says it has so far selected 13 individuals with master’s or doctoral degrees in environmental-related majors, providing them with $1,700 in scholarships per month and other support, including the accelerator program. If participating fellows succeed in founding a startup, Sopoong could make a seed investment, Han said.