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71% of NAVER D2SF-backed Startups Valued at KRW 1.3 Billion After Six Years

- DS2F’s investments in 70 startups with outstanding technology—including Furiosa AI—have revolutionized South Korea’s semiconductor industry

• - Steady growth through collaboration with NAVER nurturing a domestic technology startup community

• - Startups excited to work with NAVER as D2SF investment signals proof of startup technology capabilities and company value

• - A space dedicated to startups in the second HQ office will be a testbed and reference for co-growing NAVER and startups ecosystem

 

2021-06-08

 

NAVER celebrated the sixth anniversary of its technology startup accelerator, NAVER D2SF (D2 Startup Factory), and announced plans to promote greater growth for NAVER and South Korean technology startups.

 

“D2SF—in cooperation with NAVER—has helped nurture technology startups over the past six years, establishing itself as an investor and partner that understands technology startups the best,” said Sang-hwan Yang, Leader of NAVER D2 Startup Factory. “Through these active exchanges, technology startups quickly prove their value and are recognized for their growth potential.”

 

Yang added, “We plan to create a space for NAVER and technology startups to collaborate, experiment and grow together at NAVER's second HQ office, which is scheduled for completion this year. The space will serve as a testbed for technology startups and NAVER to explore various technologies, as well as a stepping-stone for businesses to grow.”

 

 

Recognizing Potential, Rewarding Accomplishments

NAVER D2SF has invested in 70 startups over the past six years, with a total investment amount of KRW 40 billion (USD 34.76 million). Most of these were early-stage technology startups that were about to be or newly established. 

 

 

“Our investments have always focused on the startup’s technology potential and capabilities, which business areas we can apply this technology to and how it can grow in synergy with NAVER’s services,” Yang said.

 

About 65% of teams backed by D2SF attracted their first investors after establishing their companies. Even in the early stages of these startups, before any visible results, NAVER invested in them to help realize their technological value and growth potential. “Although 80% of startups are in the B2B sector, which usually takes a long time to generate stable sales, the overall performance shows an amazing 99% survival rate amongst them, with a 70% success rate in attracting follow-up investment, and amounting to KRW 1.3 trillion (USD 1.1 million) won in total corporate value," said Yang.

 

Many of these startups have been recognized for their competitiveness in the global market by rapidly advancing their technologies after investment from D2SF¹.

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Paik June, CEO of Furiosa AI, which recently attracted an investment of KRW 80 billion (USD 69.5 million) from D2SF, said, “The nature of semiconductor development takes a long time and requires a lot of investment in manpower. NAVER D2SF is a partner that understands the value of technology and the challenges experienced by technology startups. It was the only investor that understood our company’s vision in 2017 even before we established our corporation.”

 

Creating and Coordinating Opportunities for Collaboration and Cooperation

D2SF is not just an investor, but also a ‘coordinator’ that connects NAVER’s various organizations and startups so that technology companies can grow. According to D2SF’s survey of 818 startups last year, ‘exchanges/collaborations with NAVER’ was most anticipated from D2SF.

 

About 71% of the startups² have succeeded in entering agreements with NAVER and are currently in discussion about the details. 

 

“We have consistently created opportunities for startups to interact and collaborate with NAVER’s various technology/service organizations, and we are seeing the fruits of this cooperation,” Yang said. 

 

For example, Morai—a self-driving vehicle startup that attracted D2SF to invest right after it was founded—built a self-driving simulator using data from NAVER Labs. Subsequently, NAVER Labs installed an advanced self-driving system in its ALT, NAVER’s autonomous robot platform.

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Yang explained that such cooperation benefits both NAVER and startups as NAVER can utilize the technology to update its services’ quality while startups are able to secure professional references in their early stages to grow rapidly. Over the past six years, more than 670 startups have directly or indirectly worked with organizations within NAVER through D2SF.

 

In some cases, startups nurtured by NAVER received further investments for growth through M&A. Examples include Company AI, an AI chatbot modeling startup acquired by NAVER in 2017, Buzz Music acquired by NAVER’s AR camera app Snow in 2019, and V.do, a startup acquired by NAVER Webtoon last year. This reflects D2SF’s role in creating further growth for domestic technology startups, where instances of M&A are rare. 

 

“Startups that move into the D2SF space consider ‘exchange with NAVER’ as the most important growth factor aside from the investment. In addition to NAVER’s collaborations with technology startups, synergy amongst technology startups is gradually increasing,” Yang said. 

 

Min-woo Park, CEO of Crowdworks, added, “We have been cooperating with NAVER’s AI data collection and processing projects such as Clova and Papago since D2SF’s investment. Based on the credibility we have built with NAVER, we have secured many AI companies as customers and within the D2S startup community, we were able to find many customers and partners.”

 

More Space for Greater Growth

NAVER’s second headquarters office building, which is scheduled to be completed by the end of this year, will have a separate space for startups to interact and experiment with NAVER to promote greater growth.

 

“The space dedicated to startups will have an open concept layout, built around the theme of ‘Collaboratory,’ creating a conducive atmosphere to work together,” Yang said. “In this world’s-first robot-friendly building, we look forward to seeing more opportunities for startups to grow.”

 

Yang added, “We believe supporting growth through exchanges and cooperation is the best we can do and that only we can do it. We hope that both NAVER and the startups under its wing will look forward to the innovations and changes that will emerge from the new collaborative space through more in-depth cooperation.”

 

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¹ Furiosa AI, which recently attracted the largest investment among Korean semiconductor startups, was the only Korean company to participate in the global AI chip benchmark test “MLPerf” in 2019 and ranked first in image classification and other categories. Desilo, which is currently developing machine-learning solutions based on homomorphic cryptography technology, also ranked first in iDash’s homomorphic cryptography. Bering Lab, an AI-based law/patent translation startup, also ranked first in the category of ‘Word-Level post-editing Effort’ at WMT2020.

² Startups that have passed more than one year since their establishment.