In an era of slow growth, deep tech startups built on research results and top talent are drawing attention as a future engine of growth. But crossing the so-called death valley and reaching global markets requires long-term venture capital willing to wait more than a decade. As the United States, China and Japan expand deep tech startup investment, analysts say South Korea must also push to energize its technology-based startup ecosystem.
Cha In-hwan, the new CEO of Seoul National University Technology Holdings, said the company's rivals include the investment arms of Japan's University of Tokyo, China's Tsinghua University and the Hong Kong University of Science and Technology. "We are the overwhelming leader among university technology holding companies in Korea, but we will work to become the best in Asia," he said in his first media interview, held on the 2nd at the SNU Research Park in Seoul's Gwanak district. Cha worked as a securities analyst before joining Seoul National University Technology Holdings in 2019, drawing on experience in fintech mergers and acquisitions and corporate formation. He served as head of the investment division and was recently appointed CEO at a board meeting chaired by SNU President Yoo Hong-lim. His predecessor, Mok Seung-hwan, moved to the Ministry of SMEs and Startups as head of its startup and venture innovation office.
Seoul National University Technology Holdings currently manages 16 funds with 130 billion won in assets and has invested in more than 230 ventures and startups. Its portfolio includes Rebellions, Travel Wallet, Brightonix Imaging, Pure Space and Awexome Ray. "AI chips are a market dominated by global giants, but we judged that an alternative was essential, so we have invested 5 billion won in Rebellions," Cha said. "Once we develop deep confidence in a founding team and in a market's growth potential, we stick to our principle of being the first in and staying to the end." He added: "We look at the size of the problem a founding team is trying to solve. What matters to us is whether the founder can explain the technology in the language of customers, investors and the market, and how they change course when the initial business plan does not work out."
At SNU, 30 to 40 faculty startups — companies in which a professor holds a stake of 10% or more — win approval each year. "Professors do not necessarily have to be the chief executive or the largest shareholder," Cha said. "It is more effective for the professor to focus on technology development as chief technology officer while a professional manager handles the business and the organization."
The most urgent task Cha cited is expanding long-term venture capital. While national support for early-stage startups has grown sharply, he said funding and support to cross the death valley at the Series A and B stages remain scarce. "Deep tech takes more than 10 years to produce results, but most domestic venture funds have life spans of just seven to eight years," he said. "Because government support programs try to verify performance in one- to three-year cycles, there is a tendency to manage metrics that have little to do with the essence of deep tech." He added that national strategic technologies such as semiconductors, AI, biotechnology and energy cannot be nurtured with short-term, quick-exit money, and called for larger policy fund commitments to funds with life spans of more than 10 years.
Seoul National University Technology Holdings plans to manage 26 funds with 300 billion won in assets and expand its portfolio to 350 companies by 2030. It has already taken capital commitments from members of SNU's College of Engineering and Seoul National University Hospital to invest in startups spun out of those institutions, with returns recycled into follow-on investments. The firm plans to invest from the seed stage through pre-IPO rounds while actively courting money from pension funds, the government's fund of funds, Korea Growth Investment Corp. and alumni. "The University of Tokyo's VC arm has grown into an organization managing about 900 billion won on the back of government support," Cha said. "We will begin full-scale personnel and investment exchanges with the University of Tokyo, Tsinghua and HKUST, and strengthen ties with Singapore's Temasek."
The firm is also working to export its university technology holdings model. It won an Asian Development Bank project and is providing consulting to transplant the model at four local universities, including the University of the Philippines. It has also begun consulting for four Indian universities that asked it to help build a startup ecosystem like that of the Indian Institutes of Technology. "Globalization that connects Korean ventures and startups with overseas markets is a key task," he said. "We will first secure a clear comparative advantage in Asia."
Cha named AI chips and memory, along with AI infrastructure such as power and cooling, as promising investment areas over the next three to five years. He is also watching robotics, autonomous manufacturing, next-generation batteries, small modular reactors and grid optimization technology. "The ultimate bottleneck in the spread of AI is energy," he said. "Companies that lead the global market will emerge where Korea's accumulated manufacturing capability meets AI."
He also offered advice to ventures and startups. "It is not the company that endures the longest but the company that revises itself most often that survives," he said. "A good founder has to be able to admit that a hypothesis was wrong and change direction quickly." He added: "Many ventures and startups have had a difficult time as the investment market contracted over the past two to three years, and I hope they find the courage to start again."
Cha also said he had come to feel keenly the need to connect companies with chief executives and other C-level talent through his long experience in venture and startup investment, and expressed hope that the government and universities would build a talent platform.
