South Korean startup accelerators, which are organizations that provide investment, mentorship, and other services to promising early-stage companies, are quickly expanding as more startups look to enter the Middle East.
Korean accelerators and venture capital firms are either raising funds locally or working with support organizations to discover promising startups.
Seoul-based venture capital fund CNT Tech recently discussed forming a partnership with Saudi Arabia's sovereign wealth fund operator Sanabil Investments in Riyadh, according to industry insiders on Tuesday.
CNT Tech has been the top investor in the Korean AC industry for three consecutive years from 2020 to 2022. CNT Tech and Sanabil Investments are exploring the possibility of creating a joint fund to invest in startups in the mobility, logistics, and smart farming sectors.
N15 Partners, a Korean accelerator that joined President Yoon Seok-yeol's economic mission to the UAE in Janurary this year, has now teamed up with UAE-based venture capital firm Shorooq Partners to help Korean startups enter the Middle Eastern market. They are working together to identify startups in the smart city sector and have also formed a joint fund.
Shorooq Partners, founded in 2016, operates in five countries, including Abu Dhabi, Dubai, Saudi Arabia, Bahrain, and Pakistan. They are looking for Korean startups that have a network in the Middle East and are interested in entering the market.
N15 Partners and the UAE Embassy in Seoul launched 'Eco Bridge', a project supporting startups that want to enter the UAE in December 2022. The project selected potential startups and held an investor relations (IR) competition with local investment organizations in the UAE. Various companies in fields such as metaverse and smart farms participated in the IR.
Nextwave Venture Partners, a Korean VC firm, is also working with Saudi accelerator Nmohub to help local startups enter the market and attract investment. Nmohub has an office in Riyadh, the capital of Saudi Arabia, and provides support to local startups to help them gain early independence.
"We have been promoting the joint fund while introducing promising local startups to Nmohub," said a Nextwave representative.
As private investors move quickly, the Ministry of SMEs and Startups, which runs the Korea Fund of Funds, has also joined the trend. In June this year, Korea Venture Investment Corporation (KVIC), the government-backed venture investment arm, invested $10 million in a $150 million fund with Saudi Arabia as the main investor. The two countries plan to invest at least $10 million in Korean companies through the joint fund.
"We signed an MOU in June to create a joint fund, and last month we invited 12 Korean startups to Riyadh for an investor day," said an official from the Ministry of SMEs and Startups. "We are also organizing events to help VCs and ACs from both countries interact."
This article was originally published on Nov. 14, 2023.