Social Innovation in Korea (2)
Impact Investors & Intermediaries
Impact Investment in Korea
According to the GIIN(Global Impact Investing Network) impact investing refers to ‘investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return’. Impact investment in Korea is a growing sector, as in most economies, and their roles and influence across the sector and overall society is also increasing. Impact investors identify (social) enterprises and business models creating positive social impact. The investees are usually social economic players including social enterprises and ventures, and also non-profit organizations for balance economy, community integration including disability, gender equality, environmental and children’s issues. Impact investors aim to create both impact and financial benefit from their investment, and provides mid-to-longer term investment of 5 to 10 years. In 2018, Korean government is investing a total of app. USD 93,000 to social economy, including investment for SMEs and social enterprises. This initiative also aims to encourage private investment to for these players by such market intervention.
Sopoong is the pioneering impact investor in Korea, established in 2008. The founder, Jaewoong Lee, is also the founder of DAUM, one of the biggest IT companies in Korea, and has been leading the expansion of impact investment for the past decade. Sopoong provides to its investees seed investment, accelerating programme based on their business development stages, supporting follow-up investment, community building and mentoring. Sopoong does not compete with other players—rather, Sopoong actively builds partnership with other impact investors such as Yellow Dog. In early 2018, Sopoong has also announce its support for women entrepreneurs, actively embedding the ‘gender-balance lens’ to investment. Sopoong also manages a co-working space ‘Cow & Dog’ to support social entrepreneurs and related programmes.
Crevisse Partners is an impact venture group and an incubator for social ventures. Crevisse Partners focus on innovative technology based businesses for social impact, as well as in the areas of education, environment, art and culture, with a particular interests in digitalization of business. In addition to seed investment and incubating programmes, they provide support in business management, marketing, branding and communication.
D3 Jubilee(D3) is another important impact investor, with basis in San Francisco and Seoul to
explore opportunities across the cities. D3 aims to focus on social impact in ICT innovation in healthcare, education, financial services, energy and commerce. D3 also invests in individuals with innovative ideas to support low-income families, women and immigrants. A relatively new player, Yellow Dog, invests in enterprises creating new positive social values such as sharing economy and cooperative consumption.
An interesting model is KAIST Ventures. A partnership between SK Group and KAIST, providing accelerating programme based on KAIST MBA course(KAgine) and financial investment. The programme aims to create new job opportunities for young people, support their sustainable growth. On the other hand, another impact investor HGI supports a new lifestyle of inclusion, diversity and wellbeing, leading to a value-centered life for all. HGI invests in social ventures strongly representing these values. HGI also invests in real-estate, to provide a cooperative space for all changemakers in the community.
Intermediaries for Social Economy and Innovation
Intermediaries for social economy and social innovation in Korea has been actively engaging various communities and groups for the past decade. The number of intermediaries increased as the sector expanded, and as the sector required more expertise and target-based approaches these intermediaries also developed their own strategic priority areas and specific programmes for supporting social economy and innovation.
The most common forms of intermediary businesses and services is probably the support for co-working spaces with networking opportunities, together with various individual capacity building and business incubating/accelerating programmes. For example, Root Impact in Seongsu works to provide infrastructure for social ventures in the local area by designing events and opportunities, as well as managing a co-working space at a reasonable rent. The space also provides number of useful consultancy services including legal and financial advice. The management of D-Well, a co-living space for changemakers, and Onul Salon, an event space and library for social innovation activities also contributes to the mission of Root Impact. Furthermore, Impact Basecamp and Impact Career, both designed and delivered by Root Impact focuses on the capacity building of individual changemakers and providing internship opportunities at social ventures for young people.
Work Together Foundation(WTF) has opened the first social venture incubating centre in Korea in 2009, and has been supporting social enterprises for 13 years. Their programme focuses on quality job creation, especially for more socially marginalized groups. WTF provides seed funding and mentoring, as well as a series of training for successful businesses. Also with their Smile Together Project, WT also works to support and invest in small scale social enterprises across Asia. Social Solidarity Bank(SSB), also started their work in microcredit for lower income groups, and has now expanded their service areas to support social enterprises and SMEs, and job creation for senior groups. As a social finance organization SSB draws in social financing schemes and funds and rent out seed funding for diverse social financing initiatives.
MYSC(Merry Year Social Company) is one of the early starters as an incubator—based on their expertise in social innovation consulting from the design-thinking basis MYSC currently focuses in encouraging and designing of collaborative projects with diverse stakeholders in the society. One other major areas for MYSC is the support to social businesses in international development, focusing on contents and business development for BOP(Bottom of Pyramids). MYSC also provides investment opportunities for some of the ventures they have incubated, and continues to publish reports and contents in social innovation. A similar intermediary is Impact Square, which initially had played as a consulting role for corporates’ CSR programme. Now Impact Square focuses more on the role of an accelerator, providing customized support to early stage social ventures, consulting and research services for the sector. Impact Square also manages a co-working space Seam Office and Seam Centre, a uniquely positioned space for young Christians.
Although not necessarily an intermediary in social economy, a number of startup incubators and accelerators are also interested in supporting social ventures. Asan Nanum Foundation operates a major programme for innovative non-profit organization, and also manages Maru 180, a coworking space for startups. Dcamp, another well-known community for startups, also designs and collaborates with social impact organizations to encourage more entrepreneurship in the society.
Sangrae Cho, CEO of underdogs commented
Social innovation startups could grow successfully thanks to the supports from diverse intermediaries and impact investors. To foster more social innovation startups in different sector, we need more intermediaries and impact investors. Moreover, it’s important to expand their roles on each stage of startups and develop their professional fields.
#Underdogs is
The very first social innovation company builder established by previous∙present social enterprise founders, which retains self-developed contents and capabilities to company-build.
Our mission is to incubate social innovative entrepreneurs and grow up with them.
Specifically, we serve the variety of training, incubating, & coaching programs optimized for the practical start-up starting including our signature program called <underdogs' SE Academy> served without any charge, with diverse governments, organizations, and corporations.
(* The # of <underdogs' SE Academy> alumni 114, the average start-up founding rate 73% etc.)
NOW, we are looking forward to having opportunities to network & collaborate with partners and incubate the social innovative entrepreneurs in Asia, globally together.
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