[K-Financiers] KB Global Fintech Lab acts as catalyst for startups' Asia expansion
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"We selected ones that are ready to expand more in the global market with an additional base in Singapore. For instance, Gomi has been doing business well in Vietnam, and Wavebridge also listed three funds in New York," he explained. "SsenStone also has a unit in the UK and also is expanding to Southeast Asian countries like Indonesia."
"For instance, if they use accredited certificates when rolling out their services in Singapore or other parts of Southeast Asia -- just removing the accredited certificates is not enough," he said, referring to the process of issuing and using public key and financial certificates to authenticate users for online financial transactions in Korea, which is criticized for being excessively complicated. "They have to have complementary solutions in place."
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KB Global Fintech Lab is at the forefront of supporting South Korean startups to have Singapore as a launchpad and make their way into other overseas markets.
At the same time, KB, the Korean banking giant, aims to seek new business opportunities in the Southeast Asian country’s sprawling digital finance sector.
"Although some in-house teams for digitalization exist in our company, it's difficult to develop and create everything on our own. As a result, we are now supporting startups and exploring opportunities for collaboration with them," Cha Ji-young, head of KB Global Fintech Lab, told The Korea Herald in a recent interview.
Launched in Singapore last September, the lab is currently working with the first batch of four Korean startups chosen for the KB Starters Singapore program: Gomi, SsenStone, Wavebridge and Horizon Technology.
Cha also discussed the potential funding opportunities that are available to those selected for KB Starters Singapore.
“While being selected for KB Starters Singapore does not guarantee automatic funding from KB, it can be advantageous for them if they are evaluated positively by many of KB's subsidiaries,” Cha said.
Wavebridge, which raised 10 billion won ($7.49 million) in Series B funding last year -- with about half of the funds coming from KB Investment -- is a good example of this case, Cha said.
When questioned about how KB's lab sets itself apart from other startup accelerators and government-led startup support organizations, Cha highlighted KB's connections with venture capitalists in Singapore.
"VCs usually come to us because they want to attract funds," Cha said. "And I propose to them that if they introduce me to promising startups in their investment portfolio, it can be a win-win for both of us," Cha said.
"It is good for KB because those startups have already gone through the screening process by the global VCs. This means we do not have to start from scratch when selecting local startups (for the program)," he added.
He further elaborated that this situation can also benefit VCs by opening up more opportunities for the startups in their investment portfolio to grow with the Korean financial group’s different affiliates.
During the interview, Cha also explained why these four startups were selected.
“We selected ones that are ready to expand more in the global market with an additional base in Singapore. For instance, Gomi has been doing business well in Vietnam, and Wavebridge also listed three funds in New York," he explained. "SsenStone also has a unit in the UK and also is expanding to Southeast Asian countries like Indonesia."
Currently, Wavebridge, a provider of digital asset data management and financial investment solutions, has successfully established its unit in Singapore, while the other three firms are currently exploring market opportunities.
In addition to being a global financial hub, Singapore was chosen by KB as the ideal location for its first overseas lab for startups for several other reasons, according to Cha.
“Singapore's government system provides a stable environment for startups with fewer abrupt changes. Many countries suddenly allow certain things and then ban them later, but Singapore has fewer such cases,” he said.
He also talked about the geographical advantage that Singapore has for startups that are willing to expand into other parts of Southeast Asia.
“If the CEO feels it's necessary to meet with partners from Southeast Asian countries in person after talking to them on the phone in the morning, it's possible to travel there on the same day and review business firsthand,” he said.
Cha said the lab's main task for now is assisting Korean startups to localize their products and services properly.
"Especially when it comes to fintech startups, it is important for them to make changes," he said.
"For instance, if they use accredited certificates when rolling out their services in Singapore or other parts of Southeast Asia -- just removing the accredited certificates is not enough," he said, referring to the process of issuing and using public key and financial certificates to authenticate users for online financial transactions in Korea, which is criticized for being excessively complicated. "They have to have complementary solutions in place."
This article is the sixth installment in a series of interviews on chiefs who run overseas units of Korean asset management, banking and securities companies, examining their key strategies for global expansion. -- Ed.
By Song Seung-hyun(ssh@heraldcorp.com)
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