“D2SF is a window opened by Naver to startups. Because it is low and wide open, it provides the feeling of a neighborhood cafe, tea house, or parlor where anyone can easily talk and hang out. “If there is a startup that wants to collaborate with Naver or grow with the technology it possesses, please feel free to knock on the door.”
Naver D2SF (D2 Startup Factory, hereinafter referred to as D2SF) was established in 2015 and is a ‘startup strategic investment organization’ that invests in early-stage technology startups to help them grow and pursue synergy with Naver. It has been operating near Gangnam Station for 7 years, and its achievements have been recognized internally and externally, so the same model was expanded to Naver’s new headquarters located in Jeongja-dong, Bundang-gu.
Accordingly, ‘Naver D2SF @Bundang’ aims to be a ‘Collaboratory’ (Collaboration+Laboratory)’ where startups and Naver grow through experimentation and cooperation in one space. We are exploring collaboration points with startups, including a dedicated workspace with 140 seats, restaurants, cafes, and conference rooms. In addition, Naver’s new headquarters ‘1784’ is used as a test bed to introduce new technologies or services, obtain feedback, and establish references.
We visited Naver D2SF @Bundang, which has coexistence and cooperation with startups located in Pangyo Techno Valley, and shared various information about Naver and startups with Center Director Sang-Hwan Yang.
Provided by – Gyeonggi-do
Q1. Please introduce the achievements of Naver D2SF, now in its 8th year, and the success stories of invested startups.
A. Center Director Yang Sang-hwan: D2SF was launched in 2015 and has invested in over 100 startups in various fields such as ▲AI ▲3D ▲data analysis ▲mobility ▲robotics ▲content ▲commerce. The investment mainly focused on the early stages of technology from Seed to Series A, and when investing, we focused on how to lead not only the growth of the startup but also collaboration with Naver. Currently, 1,335 startups have been connected to Naver, resulting in approximately 163 technological collaborations, and approximately 67% of invested startups have collaborated or are discussing cooperation with Naver.
D2SF considers internal communication as the most important factor in creating synergy with startups. We communicate closely with Naver’s related technology organizations from the investment review stage, and afterwards, we communicate regularly with Naver’s technology and business leaders to share the startup’s achievements. These steps also provide various opportunities to discover new collaboration demands. A representative example startup is ‘Crowdworks’, which we invested in in 2017.
Crowdworks Co., Ltd. (CEO Park Min-woo) is a data labeling company that provides a ‘data preprocessing solution’ that converts the large amount of data needed to create AI into clean and high-quality data. From the beginning of our business, we have been working with Naver to develop solutions. Naver engineers, designers, etc. worked together to develop solutions and carried out about 350 projects over a period of about 5 years. Currently, Crowdworks is continuing to collaborate with approximately 50 teams at Naver. Representative interpretation and translation services such as Naver’s Papago, Clova, and Zepeto have used Crowdworks’ technology.
Q2. I understand that less than 2% of domestic startups actually receive investment from VC. Accordingly, most startups rely on institutional support. How does Naver’s investment policy differ from general VCs and institutions?
A. Center Director Yang Sang-hwan: D2SF’s identity is defined as ‘Corporate Venture Capital (CVC).’ D2SF was created as a channel through which the innovation needed for Naver’s growth can be infused from outside. Therefore, it can be said that VC’s purpose from a strategic perspective is stronger than that from a financial perspective. When investing, we consider growth with Naver, development of new market channels, and global expansion rather than the company’s economic value and profits.
CVCs are generally operated as subsidiaries and are financially independent, so they are a form of investment aimed at obtaining economic benefits. On the other hand, Naver D2SF is an organization rather than a subsidiary, so it is a two-track system: ▲’Inlier’, which is highly related to the current business and can expect to create synergy in a relatively short period of time ▲’Outlier’, which has weak contact points but high technical value Invest by dividing the criteria into ‘.
This is also the reason why D2SF continues to invest in startups, such as opening a new base in Jeongja, Bundang, following Gangnam. This is because strategic investment requires not only immediate cooperation but also long-term preparation for new technologies and markets. Currently, we are continuously exploring to invest in new business areas that Naver is not engaged in.
Q3. Recently, there has been continued harsh criticism from industry experts who say, ‘The liquidity party for domestic startups is over.’ It is assumed that BM for profit rather than growth is now desperately needed. What is D2SF’s opinion on this, and is there any way to maximize startup profitability?
A. Center Director Yang Sang-hwan: 80% of the startups that D2SF has invested in to date are B2B companies. When the liquidity crisis fades and the economy worsens, individual consumer sentiment shrinks, which tends to put the B2C market in jeopardy. On the other hand, B2B startups that do business with companies have a certain level of demand.
The reason for this is that during a recession, most companies discover vulnerabilities and demand for automation and productivity tools increases. This is an opportunity for tech-related startups if they focus on capturing these market opportunities and building a business pipeline.
D2SF supports startups to seize market opportunities and forms partnerships through exchange and cooperation with Naver. We also actively support public relations and marketing to help create a presence in the market and actively share market trends, experience, and know-how through the startup community within D2SF.
Q4. CES 2023 is just around the corner. Among the startups invested by D2SF, please introduce one that received the CES 2023 Innovation Award.
A. Center Director Yang Sang-hwan: Among the startups invested by D2SF, eight companies received the CES 2023 Innovation Award. Among them, ▲Eva Co., Ltd. (CEO Lee Hoon) and ▲N.Light Co., Ltd. (CEO Park Jin-young) are companies located in Pangyo Techno Valley.
Eva, a company specializing in electric vehicle charging solutions, won three awards in two categories at the CES 2023 Innovation Awards with ▲self-driving charging robot ‘Parky’ and ▲vehicle-mounted electric vehicle charger ‘VMC (Van Mounted Charger)’.
‘Paki’ is a method that breaks away from location restrictions and allows a charging robot equipped with a battery to autonomously drive to charge the electric vehicle when the user calls from anywhere in the parking lot. In addition, ‘VMC’, which received an innovation award in the smart city field, is a vehicle-mounted mobile electric vehicle charging solution. When a user calls, a vehicle equipped with a battery is dispatched and provides a rapid charging service. VMC not only charges electric vehicles but also takes care of driver safety, and is attracting attention in the insurance industry and remote medical industry.
N.Light is a startup with 3D engine technology, and was recognized for its global technological competitiveness by being selected as one of the ‘Major 3D Engines Leading the 2022 Global Metaverse Market’ by CB Insights along with Unity and Unreal.
‘N.D.CAD’ developed by N.Light is a solution that allows you to design 3D models in a web browser. The entire process from 3D design to file sharing and 3D asset supply is supported on a cloud basis, creating an environment where anyone can collaborate and communicate in real-time 3D design regardless of PC environment.
Q5. The global economic crisis is expected to continue next year. In this situation, what are D2SF’s short- and medium-term plans?
A. Center Director Sang-Hwan Yang: Despite the global economic downturn, startups are growing steadily. The corporate value and follow-up investment amount have increased, and the survival rate has reached 98%. You can discover the strengths of startups that can flexibly respond to the market environment. Accordingly, the synergy between startups and Naver is expected to increase compared to 2022.
It is also an opportunity for strategic investors to meet startups that can compete with the real world. In order to seize the opportunity, D2SF continued to make new investments in the second half of this year and began to more actively discover early-stage startups by switching to a regular public offering for new investments through its website. We plan to continue active investment next year.
Q6. Lastly, what kind of presence does D2SF want to be among domestic startups? Also, please give some advice to prospective startup founders who want to move into ‘Naver D2SF @Bundang’.
A. Center Director Yang Sang-hwan: Both domestically and internationally, technology-based startups have a lonely structure. This is because the number of tech startups is less than 1/10 compared to startups in the non-tech sector. It is rare for startups to have opportunities to help each other grow, help solve problems, and share information.
Naver has focused on creating a startup community by creating a D2SF organization. Currently, over 100 startups have gathered together to build a strong community.
D2SF is a low-profile window that opens wide for startups. Naver will actively invest in startups through D2SF and play the role of an outstanding technology entrepreneur, growth partner, and synergy center. Startups who want to grow together should feel comfortable knocking.
Source: Pangyo Techno Valley Official Newsroom
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