Asia | June 9, 2017

Building social ventures in South Korea: A Q&A with Crevisse’s Wonyoung Kim

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Wonyoung Kim prefers what he does to be called venture building, instead of incubation.

Seoul-based Crevisse was founded in 2004 to “co-build” companies that use technology to create positive benefits for society in South Korea.

ImpactAlpha caught up with Kim at the Asian Venture Philanthropy Network’s annual conference in Bangkok. Below, Kim dishes on South Korea’s budding impact investing scene, on what Crevisse looks for in the social ventures it partners with and how one of its investees is working with Seoul to lower the cost and time of city planning.

ImpactAlpha: What are the kinds of companies Crevisse is looking to work with, partner with or help scale up?

Wonyoung Kim: We already have a set of companies that we’ve invested into in their early stage, seed round investment. What we’re focusing on now is to help those companies scale up. That will be our next five to seven year goal, to bring those invested companies to scale.

Q. What kind of criteria have you developed for choosing those businesses you work with?

A. Because we believe in going into mainstream markets, we are looking for companies that are based on technology — IT, or R&D — that can scale up. We do have certain areas that we take interest in, for example education, environment, lifestyle, fashion. But we don’t limit that, so we are very open. We like companies that pursue technology innovation, either software or hardware technology. In terms of territory, we’re based in South Korea now, but starting this year we are expanding into Indonesia and Vietnam.

Q. Is there a recent example of a company you’ve invested in that excited you so much you had to get involved with it?

A. One example is a company that came here with us to the AVPN conference, Spacewalk. One of the limited resources on Earth is land. Using that land and maximizing it is an important agenda for everyone. Specifically, every year rental prices go up in Korea. Seoul has very high rents. Because of that, people have a hard time finding places to live in the cities and areas around where they work. So what Spacewalk is working on is R&D on software that can produce a blueprint of the land in 60 to 90 seconds, which reduces a substantial amount of time that is put into to preliminary blueprints for architecture of a building.

Another thing that the product can do is help governments plan a city. If the government wants to do a social housing project, they need to find a certain amount of square meter space within their district, within the city. To do that, with this software, if you have the GIS data, if you put in conditions that you are looking for and this will find the land for you. Governments can then plan their strategies on what to do and how much budget to put into this.

Q. How much time and money would that save for the governments and the planners?

A. I don’t have a number. One thing for sure is that it would be impossible for the government to simulate something like this without this kind of software. Think about it this way. It takes about a month, a month and a half, to do a premature blueprint on a certain amount of square meter space of land. If you to do that for a hundred, a thousand, or a hundred thousand [spaces being surveyed], you’d have to multiply that by over a month each, so that is a lot of time. If you have this software that can simulate it in about 90 seconds, then you can actually have a very concrete idea for where the government would need to budget and plan for greater impact.

Q. Has this been applied to a city yet?

A. In Seoul Spacewalk is working with the government officials to do some city planning. They are also working with a small city in Vietnam, where they are using the software to do the same thing.

Q. I saw you didn’t necessarily like the word incubate. Is develop a better word for what you’re trying to do?

A. I think the better way to describe it would be venture building. Or a company building companies. We don’t just invest money and wait for a return. What we do is make the investment and ask the startup company to come work with us in the same physical space. It almost feels like we are co-building the business. That has been working for us so far because we don’t invest in a lot of companies each year, only one or two. It is highly selective because we need to put our own resources into those companies. That’s the model that we have.

Q. What’s current climate within Korea right now for impact investing?

A. The interest is going up, for sure. The government takes a great interest in impact investing. Seoul is well known for its support of social enterprises and impact investing is one part of the financing of social enterprises. Also, from the private sector, there are impact investors getting good results. It is very promising. There are more and more social enterprises and impact businesses that are investable that are penetrating into the mainstream market.

Q. Has it changed greatly from a couple of years ago?

A. It has changed gradually. There hasn’t been a radical change.

Q. What specific challenges or lessons have you learned through the process of investing in then co-building these companies?

A. Most of the entrepreneurs we work with are in their 20s, late 20s, and they are still quite young. Working with them is not only about building a business, it is about a lot of mentoring, not just about the business but about their life as well. About leadership. How to build a team. What it takes to be a good leader. We talk a lot about mission. Why are we doing this? How do we help other entrepreneurs as well? We need to contribute to creating an ecosystem. It is always great to see them growing, not only on the business side, but on the personal side also.

Q. How did you come to this way of doing things? Were there examples out there that you followed?

A. Crevisse was started as a social enterprise. We wanted to make money and at the same time do something for society. In the early 2000s we came across this idea of social enterprises or social ventures, so there was that moment when we learned there was a name for what we wanted to do. Then in 2010, we met another startup at a very early stage and we thought their idea was great, but at a very premature stage. Their business plan was not very well organized. We thought, if we can invest and help these people, help this startup, they can do better. What they wanted to do, if it really succeeded, we thought it would have a great impact.

Q. That company is?

A. Tree Planet. They plant trees. That was sort of a moment where we said, okay we need to do this as a serious business. It was a natural process for us.

More from ImpactAlpha’s coverage of the Asian Venture Philanthropy Network’s 2017 conference in Bangkok:

Q & A with Annie Chen: The path to a 100% sustainable and mission-aligned portfolio