Jon Medved
Founder and CEO of OurCrowd

Feb. 26 Online: Together, Israel and South Korea can take high tech even higher

The Korean pavilion at the OurCrowd Global Investor Summit in Jerusalem. (OurCrowd)
The Korean pavilion at the OurCrowd Global Investor Summit in Jerusalem. (OurCrowd)

OurCrowd hosts expert panel to discuss $80 million joint venture fund

We tend to invest where we feel most comfortable, so when I was approached a few years ago with the opportunity of investing in a South Korean-based e-commerce startup, I demurred. Bad move. Today, Coupang Inc. (NYSE: CPNG) is the largest online marketplace in South Korea with a market cap of $28 billion.

Since then, I have watched the development of South Korea’s tech ecosystem with interest, not least because of the similarities with Israel. While Israel is the world leader in tech investment with 5 percent of its GDP invested in R&D, South Korea is a close second – the only other country in the world to invest more than 4 percent of its GDP in innovation. In absolute terms, both countries are in the Top 10 for total tech investment.

On Monday, February 26, OurCrowd will be hosting a panel of experts for an online discussion on the growing potential for technology cooperation between Israel and Korea.

We will also discuss the first joint Israel-Korea venture fund, for which $48 million has already been committed by major institutions.

Although South Korea is much larger than Israel, with more than 50 million people to Israel’s 10 million, the two countries share similar complex diplomatic relations with uncooperative neighbors – and similar close alliances with the US and other democratic allies. Both countries value social systems built on close ties of family, community and religion. Both have become successful exporters of niche popular culture. Israel specializes in TV formats and fashion, while South Korea excels at music and movies. The modern cuisine of both countries is attracting growing interest from the cognoscenti.

Israeli Foreign Minister Eli Cohen (L) and South Korean Foreign Minister Park Jin in Seoul in June, 2023 (GPO)

There are major differences, of course. Israel’s stunning economic growth in recent years has been fueled by an explosion of small, nimble high-tech startups which have attracted more than 400 multinationals to build R&D centers here, which in turn have spawned a broad range of innovation across multiple sectors, buttressed by military technology and transformed for civilian use.

South Korea, on the other hand, is home to some of the world’s largest industrial manufacturing companies, with heavy industries like steel and shipbuilding and global consumer brands from automobiles to smartphones, including household names like Hyundai, Kia, LG and Samsung.

If Israel’s ecosystem is a great place to create a startup, South Korea’s ecosystem is a great place to scale a startup and achieve commercial success.

In recent years, the Israeli and South Korean governments have jointly invested $77 million in 196 bilateral technology projects, including $18 million of funding in 2023 for robot and AI projects to boost cooperation in advanced industry sectors.

“We will establish a comprehensive global technology cooperation strategy to expand the scale of technological cooperation with Israel, a powerhouse in basic source technology,” Lee Chang-yang, South Korea’s Minister of Trade, Industry and Energy, told a senior delegation led by Israel’s Foreign Minister Eli Cohen at a Korea-Israel Business Seminar in Seoul in June 2023. The two countries would “expand cooperation with world-class cutting-edge research institutes, create a research and development ecosystem, and resolve regulations,” he said.

Following its success in the US, Intuition Robotics signed a $9.4 million contract to develop ElliQ, the company’s AI-powered robotic companion that relieves isolation among the elderly, in South Korea (Intuition Robotics)

One of the deals signed in June was a $9.4 million contract between SK Telecom, South Korea’s leading mobile carrier, with OurCrowd portfolio company Intuition Robotics to develop its ElliQ AI-powered robotic companion for the elderly, enhanced with Korean language and cultural abilities.

Another was an agreement in the field of quantum computing. “By leveraging the collective expertise of both Israeli and south Korean researchers, we aim to accelerate the development of quantum computing technology and propel the industry to new heights,” said Itamar Sivan, Co-founder and CEO of OurCrowd portfolio company Quantum Machines, who signed three MOUs with the Korea Quantum Computing Industry Leaders’ Alliance, quantum software company Orientom, and the government-funded Korea Research Institute of Standards and Science.

Other OurCrowd portfolio companies have already discovered the benefits of business ties with South Korea, including AI chip pioneer Hailo, whose Seoul office handles business ties to local industrial and automobile customers. In 2022, CytoReason, a developer of computational disease models for efficient drug discovery, signed a commercial partnership with Helixrus, a South Korean company focused on biological big data. Major corporations like Samsung, LG and SK Telecom are already valued partners in a range of OurCrowd startups. In 2019 Samsung acquired OurCrowd smartphone camera startup CorePhotonics.

The synergies between the two ecosystems look extremely promising.

Since the 1990s, Israel’s growing economic success has been accompanied and nurtured by the growing realization that it cannot address a global market without global partners. More than 80 percent of investment in Israel’s tech ecosystem comes from abroad, bringing with it international partners and expertise. Israeli entrepreneurs have learned that they do not have to pretend to know everything, and that there are huge benefits to bringing in outside experts with different skill sets to complement those of the stars of the Startup Nation.

South Korean businesses understand and develop their own technology, but they are also adept at long-term planning, have a long track record in large-scale manufacturing, and have proven results in creating systems that scale.

We believe in the premise that diversification is good for innovation, and also for investors. Israel, like Silicon Valley, benefits from the broad cultural diversity of its largely immigrant population. When two complementary ecosystems from two very different cultures like Israel and South Korea start working together, the value added can be exponential.

To register for ‘Korea-Israel Venture Opportunity’ online on Feb. 26, click HERE

About the Author
Jonathan Medved is the founder and CEO of OurCrowd, based in Jerusalem, a global investment platform where accredited investors can participate in private market startups and alternative assets, . Nothing contained in and accompanying this communication shall be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any security by OurCrowd, its portfolio companies or any third party.
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