The Future of Social Ventures and Smart Insurance in Korea

By Ana Camarena Published on July 29, 2020

Plug and Play is one of the most active Venture Capital firms in the world and, as such, we are very well aware of the latest trends in the investment industry. On July 7th, 2020 (July 8th, Korean time), we held a virtual event where we discussed the current landscape of social investing in Korea. 

We also had with us five future-thinking startups pitching their solutions: CrePASS, Exosystems, HiNounou, lgloo (formerly Axinan), and Tractable. 

A Fireside Chat: Social Investment in Korea (and Beyond)

During the first part, which focused on social investment in Korea, we hosted a Fireside Chat with three world-class guests: Saeed Amidi, Founder & CEO, Plug and Play; Ji-Hwan Lee, Ph.D., Professor of Strategic & International Management & Director of Social Entrepreneurship MBA, KAIST College of Business; and Kyungsun Chung, Chairman, HG Initiative.

Check out the full Fireside Chat below:


The Story of KAIST College of Business & HGI  

Social entrepreneurship is growing around the world, primarily driven by socially-aware younger generations. In recent years, South Korea has been recognized by Thomson Reuters Foundation as one of the best countries to be a social entrepreneur, boasting over 1,000 social enterprises, and more than 10,000 people involved in the sector. 

What’s the future of social entrepreneurship around the world? And what can other countries learn from the South Korean ecosystem? 

Ji-Hwan Lee, Ph.D., is a professor at the KAIST College of Business, where they aim to educate and nurture entrepreneurs who want to solve social problems by creating “impact startups”. In order to do so, they give a full scholarship for the two-year tuition, and they cover other expenses for early-stage startups. At KAIS, they also have their own venture capital, to provide funding opportunities to early-stage startups after graduation. “This unique program is possible because Chey Tae-won, chairman of SK Group, is one of the most prominent industry-leaders in considering the importance of social values in business management”.

Building Impact Startups From Scratch

How does KAIST Business School enable its students to build effective impact startups? 

“In this program, our students start by identifying social problems,” said Professor Lee. “After identifying and articulating their social missions, they develop their innovative business models. These projects are, hopefully, based on technologies, because KAIST is a technology and engineering school, and we encourage our students to take advantage of those technologies.”

“We also need to teach our students to develop their business skills and to manage their organizations. For that purpose, we hired professors or faculty members who are interested and who have expertise in social issues, rather than just business issues or economic considerations.”

The Importance of Backing Strong Startups

Kyungsun Chung is Chairman of HG Initiative, an impact-driven organization that seeks to address diverse social issues through sustainable innovations. “We had a more non-profit approach, our whole mission was to support people doing something great for their society. We defined them as change-makers,” said Chung during the Fireside Chat. “We focused on creating the ecosystem for them, the community of like-minded people who want to solve social problems through business models.”

“But now I see the importance of investing as well,” Chung told us. “And that’s why I started HGI. At HGI we’re also investing in real estate because we want to create the ecosystem for them [the change-makers]. It’s been a great journey so far, but now we are going to the next level and we’re calling it the Sustainable Future Alliance because I think more large companies want to be more sustainable and work with social enterprises and startups. So we are sort of building the bridge between them.”

Saeed Amidi’s View

“We try to make a positive impact on the entrepreneur’s journey, with seed capital, with connections and creating an environment where entrepreneurs can learn from each other,” said Saeed Amidi, CEO and Founder of Plug and Play. “This year’s main initiative was to expedite social impact on sustainability. With COVID-19, this social impact became even more needed and evident. This is the beginning of our journey.”

“We are not a non-profit,” Amidi remarks. “We need these startups to have smart founders, to have great ideas and business models, and to do a good social and environmental impact. We feel that is the only way that the business can scale and sustain itself.”

What kind of startups is Plug and Play supporting? Amidi mentioned a few examples, one being PayActiv, a company that provides liquidity for people who are in need, “the people who live paycheck to paycheck.” Also, startups that focus on the unbanked: people that, for different reasons, don’t have access to a bank account.

The Collaboration Between Large Corporations and Entrepreneurs

“Large corporations have enormous resources and capabilities, much larger than governments or NGOs” stated Professor Lee. “Solving social problems may not be the first priority of those large corporate corporations, because they have a number of other stakeholders, but the thing is, sustainability and meeting ESG criteria are becoming new sources of business opportunities, even for these large corporations. So corporate resources and capabilities can and must be utilized in that direction. Those initiatives require more entrepreneurship, and more active collaboration and partnership with innovative startups. The collaboration between these established companies and early-stage startups may be a unique and enormous source of new economic growth as well.”

The Startups

CrePASS

CrePass is a peer-to-peer financial integration platform that searches to provide those with low or non-existent credit ratings with the opportunity to receive financial benefits through a fair assessment within institutional financing. 

They analyze and evaluate personal tendencies by using alternative credit scoring based on big data and digital behavior, compared to previous financial transaction history or customer-owned assets evaluation.

Why is this startup relevant?

“It's interesting how the startup is not only going to help the Korean market, but also help the asian credit score market,” stated Eugenio González, Senior Ventures Associate at Plug and Play Insurtech. ”Blending traditional credit scoring with alternative data purposes, they are shining light on thousands of Koreans that either do not have a credit history or do not have a good credit history. This is a problem that is particularly sensitive for students that are just joining the job market, and for those that have low credit scores, but can only get access to high-interest debt. This further puts pressure on them to fulfill their financial obligation.”

Exosystems 

Exosystems provides rehabilitation patients with an IoT solution that offers an optimized exercise program by analyzing user’s activity data. Previously, rehabilitation costs were high and rehabilitation programs were available only in limited locations, such as hospitals. Exosystems lowers rehabilitation costs, while using technology to provide tailor-made programs. 

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Why is this startup relevant?

“Exosystems was one of the most successful startups of our Health program in Japan,” said González. “In a country with such an aging demographic, this shows us something. We're starting to see more and more startups jump into this market, which is called Silver Tech, to provide better experiences for senior citizens.”


It’s expected that the Korean market will have the oldest population worldwide by 2045, so startups like Exosystems will become more and more relevant during the upcoming years. 

HiNounou 

HiNounou aims to help seniors live longer, healthier, happier, and at home. In order to do that, HiNounou provides Seniors and their families with a one-stop, comprehensive home wellness solution.


Why is this startup relevant?

“HiNounou was part of our Insurtech batch in Singapore and their traction is remarkable,” said Eugenio González. “They’re working with AXA on providing telecoms assistance to patients, and they’re working with other industry leaders, like PingAn in China. 

“50% of individual healthcare spending in China is out of pocket, which results in additional stress and financial positions of Chinese households. There is a shortage of around 10 million professional caregivers for seniors in China. And we've yet to see a country that has enough caregivers to account for the aging population. So it's basically a race that every country is losing. So it makes absolute sense to focus on this segment of the market.”

Igloo

Igloo is a Singapore-based, insurtech AI platform that provides accessible insurance by creating digital insurance products. They’re leaders in the region in the B2B2C insurance model, and they’ve distributed more than 40 million unique policies in the last two years through their digital partners. 

Why is this startup relevant?

“It’s hard not to be a fan of Igloo,” confesses González. “ They recently announced a new round of funding. They were funded in 2016 by Wei Zhu, which is the former CTO of Grab, the Singaporean ride-hailing company. And they're doing everything right.”

“What's really interesting about them is their ability to provide what's known as insurance in a box, which is essentially a digital startup toolkit designed to enable insurers and incumbents to fast track their data capturing product deployment. Insurance in a box leverages API's Software as a Service and the cloud to fast track product development, as well as integrations with other platforms for the digital distribution.”

Tractable

Tractable is a software company that develops artificial intelligence for accident and disaster recovery. They provide a deep learning automation platform created to visualize image recognition and text understanding. Tractable's platform receives image and video, performs analysis and shares return results to any connected device within a short span of time, enabling organizations to unlock disruptive applications and provide accuracy on image recognition tasks.


Why is this startup relevant?

“Tractable uniquely combines AI, computer vision and damage assessment, and they keep benefiting from the millions of pictures taken by the users to further enhance algorithms,” said González. “That’s why Tractable is one of the most successful startups in our ecosystem.”

“They have successfully gone through our programs in the US and Europe, and they're recently launching in Asia. By leveraging the ecosystem in Japan, they've gotten massive adoption from the partners. They're becoming the industry standard for damage assessment worldwide.”