Financial subsidiaries of Samsung Group such as Samsung Life Insurance and Samsung Fire & Marine Insurance are increasing amount of their investments into FinTech companies.
They are investing into a fund set up by Samsung Venture Investment Corporation (SVIC) to focus on companies that can create business synergy.
According to venture investment industry, SVIC is going to finish up setting up ‘SVIC new technology investment fund 46’ that is worth $44 million (50 billion KRW) sometime during this month and carry out investments starting from the first half of this year. Samsung Life Insurance contributed $43.6 million (49.5 billion KRW) on this fund, which is set up mostly for investments into Insurtech companies.
“We are contributing to this fund in order to invest into promising Insurtech companies.” said a representative for Samsung Life Insurance. “However, we still need to go through decisions made by our board of directors.”
Samsung Fire & Marine Insurance also participated into SVIC’s R&D new technology investment fund 44, which is worth $35.2 million (40 billion KRW), back in January as a major contributor.
It is unusual for financial companies to make investments after setting up large-scale funds for innovation of FinTech industry. Although commercial banks set up FinTech labs to support startup FinTech companies, number of actual investments was not much due to various limitations on contribution set up by South Korean Government.
In 2018, SVIC invested $17.7 million (20.1 billion KRW) into FinTech and security industries. This investment is SVIC’s second biggest investment followed by its $91.5 million (104 billion KRW) investment for materials and manufacturing and engineering industries.
SVIC’s investments into FinTech industry have taken place mostly through SVIC new technology investment fund 38 that was set up through contributions by Samsung Group’s financial subsidiaries in 2018.
Samsung Life Insurance, Samsung Fire & Marine Insurance, Samsung Card, and Samsung Securities set up $176 million (200 billion KRW) fund in March of last year to create new businesses and to look for FinTech companies. This is the biggest investment fund out of all investment funds managed by SVIC and its amount comes close to the amount of SVIC 32 and SVIC 33 that were set up independently by Samsung Electronics in 2016.
Considering how amount of the largest fund that was ever set up by political finance to invest into FinTech companies was only $13.2 million (15 billion KRW), amount of investment funds set up by Samsung Group stands out even more. Also, there was not any fund from a financial industry that was specialized for FinTech companies in the past.
“SVIC has been continuously investing into promising FinTech companies even before South Korean Government came out with its measures to support FinTech industry.” said a representative for venture investment industry. “After relevant systems were improved, entire financial industries have started to increase their investments into FinTech companies.”
Samsung Life Insurance and Samsung Fire & Marine Insurance are also pushing for various cooperative models aside for investments.
Samsung Fire & Marine Insurance introduced ‘mobile dog nose print recognition solution’ to Finpet in January while Samsung Life Insurance introduced an automatic guarantee analysis solution called ‘LEMON Bridge’ to d.Lemon.
Financial industries predict that this trend of increased investments will become more generalized as it has become possible for them to incorporate FinTech companies as their subsidiaries.
“Financial companies had had difficulties in investing into promising FinTech companies due to various regulations.” said a representative for a financial industry. “However, they are now looking into making active investments into promising FinTech companies as South Korean Government announced its plan to revise relevant regulations.”
Staff Reporter Ryu, Geunil | ryuryu@etnews.com & Staff Reporter Park, Yoonho | yuno@etnews.com