Korean startups seek Bay Area venture capital

Eager to make their mark in a broader market, startup American subsidiaries of successful South Korean firms pitched San Francisco and San Mateo County venture capitalists Tuesday at the Palace Hotel in The City.

The venture conference was held by the Korea IT International Cooperation Agency, a San Jose technology incubator created and fully funded by the government of the Republic of Korea. The seven-year-old organization seeks to smooth the passage of successful Korean companies into the United States market, CEO Kevin Lee said.

“They [new entries to the U.S. market] have made the same mistakes allthe time,” Lee said, citing bad hires, poor branding and poor customer targeting as frequent errors. “In the beginning, we had a lot of failures.”

Now, he said, the country is trying to smooth the way so that Koreans, less numerous than Chinese- or Indian-Americans in the Bay Area, can develop the type of strong business ties those nations already possess — but in less time.

South Korea makes an attractive investment area because of its openness to foreign investment, stability and proximity to the markets of China and Japan, said Don Plaisted, a senior associate at San Francisco international investment firm Draper Investment Company LLC, which was an initial investor in Luxembourg’s Skype Technologies. His firm already invests in a South Korean computer encryption company called Commsec, and he had meetings Tuesday with two other Korean firms at the conference, Honest Technology and I-ON Communications Co. Ltd.

Han Kim of Altos Ventures in Menlo Park said his firm also has invested in two Korean companies, and is actively working to bring one of them, Pandora.TV, to San Francisco. Pandora is Korea’s version of Google Inc.’s (GOOG) YouTube.

“We’ll be doing a global launch soon in English, Chinese and Japanese,” Kim said, adding that Pandora will not be in the incubator because its 30-odd slots are all full.

Other companies presenting at the conference included free online game publisher OnNet Inc.; online tutoring marketplace Interpark Communications Inc.; CDNetworks, an online infrastructure company that makes downloading videos and video games faster; and Danal Inc., a company that enables purchases using a mobile phone, with the charge going to the user’s phone bill.

Danal recently made headlines when Morgenthaler Ventures invested $6 million in the company. The company expects to fly the incubator nest within a year and expand to 12 employees from six, CEO Paul Kim said.

kwilliamson@examiner.com

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