[INTERVIEW] Korea to Global, how NPX Capital wants to change the world

The webtoon market is a promising one — or at least in the eyes of a young Korean investment company. NPX Capital is an alternative investment management firm founded in 2016 by Samuel Hwang, a 39-year-old start-up expert who established ..

Executives from NPX Capital pose for photos during an interview with the JoongAng Ilbo at the JoongAng Ilbo building in Sangam-dong, western Seoul, on July 21. From left are: Kah Jong-hyun, chief operating officer of Terapin Studios; Samuel Hwang, CEO of NPX Capital; and Kim Do-young, chief legal officer of NPX Capital. [WOO SANG-JO]

The webtoon market is a promising one — or at least in the eyes of a young Korean investment company.

NPX Capital is an alternative investment management firm founded in 2016 by Samuel Hwang, a 39-year-old start-up expert who established New Pathway Education in China in 2009.

The firm has since been making its name among local venture capitalists after successfully joining early-stage investments into promising start-ups, such as The Pinkfong Company, Riiid and Mathpresso.

Having taken on the role of the quiet helping hand for start-ups, NPX Capital is becoming more active in the market, especially in the webtoon industry.

Last year, NPX acquired Copin Communications, a Korean webtoon production company, for 65.4 billion won ($49.9 million) and flipped it to become a 100% subsidiary of its US parent company, Terapin Studios, in April.

Terapin Studios bought Toomics, an online webtoon service, for 202 billion won last month.

NPX Capital has also been proactively recruiting experts in the tech and content field.

This year, it hired Kim Do-young, a former partner at Kim & Chang, as the chief legal officer (CLO), and Kah Jong-hyun, former vice president of YG Entertainment, as the chief operating officer (COO) of Terapin Studios. Kim specialized in corporate law and Ka was in charge of innovation strategies at the K-pop agency.

The JoongAng Ilbo sat down for an interview with Hwang, Kim and Kah to talk more on the webtoon-oriented goals of NPX Capital at the JoongAng Ilbo building in Sangam-dong, western Seoul, on July 21. Following are edited excerpts.

Toomics, a local webtoon service, recently acquired by Terapin Studios [SCREEN CAPTURE]

Q. NPX Capital has been taking a more hands-on role in the recent years, acquiring webtoon companies and also participating in management. Why did you decide to come to the front?A. Hwang: We need a unique project to survive the competition with other private equity funds. During our long search, we found a crack in the wall.

There have been many cases where [start-ups] succeed in Korea by raising funds either domestically or from abroad, but seldom have there been start-ups that started with local funding and made a global hit big enough to draw in money from overseas to Korea. With that in mind, we set our goal as "Korea to Global."

It's been proved by the "Squid Game" Netflix original series that Korea has a competitive edge in the global content race. We decided on the webtoon industry, where the opportunities for growth are abundant. What were the reasons for joining an investment firm, which is quite different from your previous career paths?Kim: When I was at Kim & Chang Law Firm, I was in charge of flipping Copin Communications into a Terapin Studios, a U.S. entity, after NPX Capital acquired it. CEO Hwang offered me an opportunity to join a project where he takes the Korean culture to the global stage, and I joined him because I saw the charm in the idea.

I spent 25 years giving consultations to companies at Kim & Chang and dealt with countless conflicts. Now, I wanted a chance to experience that for myself at a company. Kah: I attended the same high school as CLO Kim. It intrigued me to hear that my friend, who I thought would spend the rest of his life at Kim & Chang, decided to jump careers, then I came to learn about NPX Capital's [webtoon] project when YG Entertainment and the firm partnered up for a project. I decided to join because I also wished to see a domestically-grown business succeed in the global market.

Toomics, a local webtoon service, recently acquired by Terapin Studios [SCREEN CAPTURE]

Please give us more details on the plans that NPX Capital has in webtoons.Kah:We plan to expand the intellectual property portfolio, which has proven quality through webtoons, into other forms of media, such as films or dramas.

Despite the amount of time and money needed to produce films or dramas, whether or not they will succeed is always unclear. Our plan is to test out the potential of IPs by making the ideas of writers into webtoons and see how successful they could be in the market.

This process not only cuts the time and money needed to adapt a story into films or dramas, but it also decreases other business risk factors. Is not the path to making money to minimize cost and maximize profit? Simply put, we're going for the one-source multi-use strategy. Kim:All content is based on stories. But industry-wise, it's important to take the ideas that were only inside an author's mind and test them in the real market to see what "gets through" to the consumers. We'll expand popular content into longer stories and gradually evolve them into films, dramas and games so that we eventually create a whole ecosystem. Hwang: The production cost for webtoons is smaller compared to other forms of content. It takes about 50 to 100 million won to make a 10-episode story, and that's how we can efficiently test out intellectual property.

Executives from NPX Capital during an interview with the JoongAng Ilbo on July 21 [WOO SANG-JO]

How do you plan to differentiate yourself from the top two frontrunners in webtoon, Naver Webtoon and Kakao Entertainment?Kah: Our business model centers on using the original intellectual property from webtoons to produce films and dramas by ourselves.

Of the 350 staff members at Copin Communications, 300 are related to webtoon production. So any intellectual property created here is ours. This is different from the way that other companies operate, where webtoon production companies get funded from an online streaming service but give away all rights of the intellectual property to the streaming platform.

Because we plan to make our own intellectual property and produce films or dramas with our capital, we only hand over the distribution rights — guaranteeing a continued source of income. Who will be making the video adaptations?Kim: Copin Communications recently acquired drama production company iWILL Media Corporation. It made the drama series "Golden Mask," that is currently airing on KBS. We are also pushing to acquire a production company in the United States. We are growing our competence in the video production field. Why did Copin Communications become a part of a U.S. entity?Hwang:Even if we carry out our business in Korea, there are benefits to being a U.S. company, especially in drawing in global investment without discounts related to currency fluctuation. So we structured our business model so that we take a Korean start-up and grow it in the global stage, which can also raise funds internationally. Kim: It's a lot easier for us being a U.S. company to approach the global market with Korean intellectual property. The United States also has upper hand in accessing Hollywood — the center of the U.S. media content market. What other plans do you have for the future?Hwang:We are preparing to go public on the U.S. Nasdaq stock exchange by merging with a special purpose acquisition company next year. This is not our ultimate goal, of course. Going public is just a step for us to paint the bigger picture. We will work on the details of growing Korean intellectual property globally, after we go public in the United States.

BY PARK MIN-JE [yoon.soyeon@joongang.co.kr]