Written by Winston Kim, Managing Director of BCC Global Media
We invest based on the capabilities of the management team. Whether the founding team can grow and evolve alongside the company is a crucial factor in our investment decisions.
Alex Kim, earning his bachelor’s degree in Electrical Engineering from Yonsei University, founded an IT company rather than joining a large company in search of stability. Later, he also earned an MBA degree from the University of Chicago. He worked at Goldman Sachs, Soft bank, and Hana Ventures. Now, he is the CEO of UTC Investment.
BCC Global: It has been a year since you became CEO of UTC Investment. Tell me about your current and past stories recently.
Alex Kim: UTC investment has invested in around 160 portfolios. We also made a few executions of investments in the 2nd half of the last year while I was focusing so much time on finding more about these portfolio firms in the first half of the last year. Korean venture capital’s investment standards have been so heightened since 2023, compared to the 2010s.
BCC Global: You were an engineering student and your first job was a founder of an IT company which is rare. The history of Korean venture capital is not too long. Probably you are the 2nd generation of venture capitalist in Korea. Were there any changes on founders of startups in Korea from 2000s to 2020s.
Alex Kim: From the 2000s until about 2015, many Korean startups were primarily manufacturing firms supplying products to large conglomerates.
During the late 1990s, as Korea transitioned from an analog to a digital economy, the hardware ecosystem was dominated by 2G mobile phones rather than today’s smartphones. Companies producing components for these devices attracted substantial investment in hardware.
In software, the mid-90s saw the expansion of the internet, leading to the emergence of numerous internet service providers. Many of these services no longer exist, but at the time, their proliferation was significant.
As a result, from the late 90s until around 2010 or 2011, investment was heavily directed toward companies that supplied large corporations and internet service firms.
In the hardware industry, startups typically secured venture capital funding before becoming primary vendors for large corporations, with many subsequently growing their revenues and going public.
On the software side, a large number of internet services emerged, attracting venture investment, leading to IPOs or acquisitions.
From 2010 onward, the smartphone ecosystem emerged, dramatically altering the landscape.
Investment in large corporations’ first-tier vendors decreased significantly, while the smartphone boom created new opportunities for startups to directly engage with B2C customers.
Apps and digital services began shifting offline business models to mobile platforms. Technologies that enabled these transitions—by connecting users through mobile touchpoints while providing offline execution—received substantial VC funding, went public, and were acquired by global unicorn companies.
Looking at Korean startups today, growing to a scale of 100 billion to 200 billion KRW (approximately USD 70 million to USD 140 million) is not particularly challenging. However, advancing beyond that stage remains difficult.
It wasn’t until the 2010s that we began seeing companies in Korea with valuations of 500 billion KRW (USD 340 million), 1 trillion KRW (USD 700 million), or even 2 trillion KRW (USD 1.4 billion) through VC or PE investments. Previously, it was almost unheard of for companies to reach trillion-KRW valuations before going public.
Since the 2010s, however, companies with valuations exceeding 1 trillion KRW before an IPO have become more common, and such valuations remain feasible today. However, even after reaching this level, sustaining value ultimately depends on whether the company can back it up with real revenue and profitability.
In this regard, the Korean market and the startup ecosystem still impose limitations on companies scaling beyond the 1 trillion or 2 trillion KRW mark.
BCC Global: You’ve been in the investment industry for over 20 years and previously worked at SoftBank. Do you think South Korea can produce global investment firms on par with SoftBank in the future?
Alex Kim: There are a few conditions that need to be met for this to happen.
First, Korean companies need to adopt a long-term investment stance. Some business groups consistently generate stable profits, regardless of the industry.
If companies that generate steady profits every year were to allocate 10–20% of their earnings toward continuous investment—not based on fleeting trends but as a long-term strategy—this could create a more robust investment environment.
Currently, many companies follow market trends, investing heavily in industries that are in vogue, often at peak valuations. When the economy slows, they retreat from investment, only to re-enter a year or two later, often lagging behind foreign investors. This reactive investment cycle keeps repeating.
Instead, companies with stable profits should invest 10–20% of their earnings consistently—not just for financial returns, but also to identify and nurture new business opportunities.
Second, Korean society has become more accepting of startup failures, but it remains overly harsh on established companies that attempt new ventures and fail.
While startups enjoy some level of tolerance for failure, more mature companies face severe scrutiny when they try and fail. However, companies can only grow by continuously experimenting.
If Korean society remains excessively critical of established companies attempting new ventures, it will hinder innovation. Both startups and established firms should be granted the same level of tolerance for failure in order to foster growth.
BCC Global: There’s a saying that the true capability of a startup founder becomes evident after they sell their stake in a Series B round. While Korea has improved its governance and compliance systems for startup founders, there’s still room for improvement compared to global standards.
Alex Kim: This is not an easy issue to resolve, but one potential solution is a well-functioning board of directors.
Each executive, whether the CEO, CSO, or CFO, has their own role. A strong, well-structured board consisting of competent professionals can address compliance and governance issues.
When a company is small, it can grow based on the capabilities of one or two key individuals. However, once it reaches a certain scale, effective teamwork and organizational management become essential.
A robust and well-functioning board of directors is the foundation for scaling a company.
When we discuss major corporations, we often emphasize the separation of ownership and management. Similarly, startups should be prepared to separate ownership and management as they grow beyond a certain stage. While this separation isn’t always necessary, the ability to implement it is crucial.
For that to happen, a well-functioning board of directors is the first prerequisite.
BCC Global: Which sectors do you see as promising for investment in 2025 and 2026?
Alex Kim: AI will continue to be a major focus. Recently, China’s DeepSeek has gained significant attention, and 2025 will likely be the first year where many AI services can be offered at a lower cost, even without relying on foundation models.
Instead of installing 50,000 GPUs in data centers, companies will experiment with AI services that require fewer resources. For startups that lack capital, focusing on AI services rather than foundation models presents greater opportunities.
Aerospace and defense are also emerging as key industries. Only countries with well-developed mechanical and electronic industries can excel in this space, and while Korea is not yet the global leader, it ranks near the top of the second tier.
Furthermore, K-lifestyle—including content, food, and cosmetics—is an area of significant growth. Korean cosmetics, which were previously exported primarily to lower-GDP markets like Southeast Asia, are now gaining traction in high-income regions like Europe and the U.S. This marks a fundamental market shift.
BCC Global: What do you prioritize when making investment decisions, beyond financial statements and management performance?
Alex Kim: Both financials and leadership capabilities matter, but in early-stage investments, the founding team’s ability to grow and adapt is crucial. A company can scale to 100–200 billion KRW, but going beyond that requires the leadership team to evolve alongside the company.
Ultimately, investment decisions come down to people.