Kakao Ventures – Early Upbit Investment Delivers Major Return for Firm
Kakao Ventures – South Korean startup investment firm Kakao Ventures has recorded a substantial gain after selling part of its stake in Dunamu, the operator of cryptocurrency exchange Upbit. The exit highlights the long-term value created from backing young companies before they become established market leaders.
Startup Investment Success –
Kakao Ventures first invested in Dunamu when the company was still a small startup with only three employees. The venture capital firm made an initial seed investment of 200 million won, equivalent to about US$129,575 at the time.
The company later joined two additional investment rounds in 2015 and 2017, committing a combined 3.3 billion won. Over the following years, Dunamu expanded rapidly and became one of South Korea’s best-known digital asset businesses through Upbit, the country’s largest cryptocurrency exchange.
Partial Stake Sale Generates Strong Returns
Thirteen years after the first investment, Kakao Ventures and its parent company, Kakao Corp., sold a portion of their Dunamu holdings. The transaction generated about 2.2 trillion won in proceeds for the two companies.
Kakao Ventures Chief Executive Officer Kim Ki-jun said the investment produced more than a 1,000-fold return for the venture capital firm. He described the result as evidence of the company’s strategy of identifying founders with the ability to adapt to changing markets and build new business opportunities.
Kim said Kakao Ventures expects to secure around 300 billion won in investment returns by the end of the year.
Focus Remains on Early-Stage Startups
Founded in 2012, Kakao Ventures focuses mainly on seed-stage and Pre-Series A investments. The firm had about 410 billion won in assets under management as of June.
According to Kim, Kakao Ventures was the first institutional investor in roughly 90 percent of the nearly 300 startups in its portfolio. The firm has built its investment approach around supporting companies during their earliest stages, when access to capital and strategic guidance can have a major impact on future growth.
Over the past five years, Kakao Ventures has generated approximately 150 billion won in annual investment exits. The company expects to maintain a similar level of returns in 2027, supported by the possible public listing of South Korean artificial intelligence chip startup Rebellions.
AI Chip Startup Could Drive Future Exit
Rebellions, which develops AI semiconductor technology, is currently valued at about US$2.3 billion. Kim said the company is reaching a stage where an initial public offering could provide an opportunity for Kakao Ventures to recover part of its investment.
The anticipated listing reflects growing investor interest in companies connected to artificial intelligence infrastructure, chip design and advanced computing. Demand for AI-related technology has increased globally as businesses and governments invest in data centers, automation and high-performance computing systems.
Global Investors Show Interest in Korea
Kim said overseas limited partners have recently shown stronger interest in South Korean startups. Some international investors are seeking introductions to local companies, while others are exploring secondary share transactions.
He said global investors are paying closer attention to South Korea’s manufacturing capabilities, supported by major companies including Samsung Electronics, SK hynix and Hyundai Motor. The country’s technical workforce and strong research talent are also helping improve confidence in its startup ecosystem.
A stronger domestic stock market has added to expectations that more Korean startups could achieve successful IPO exits in the coming years.
New Fund Targets Capital-Intensive Technology
Kakao Ventures is now considering the launch of a new fund worth about 100 billion won, nearly three times larger than its previous funds. The proposed vehicle would allow the firm to make larger early-stage investments in sectors that require significant capital, including AI infrastructure, hardware and semiconductor technology.
The company has also expanded its investment activity outside South Korea. Since last year, Kakao Ventures has invested in Silicon Valley startups operating in areas such as space technology, robotics and semiconductors.