In 2010 when Bong-jin Kim left' Naver' (Korea’s primary online search portal), he had no idea about Venture Capital or ‘Exit’. Additionally, he had no interest in global expansion. He built his startup to focus on solving ‘small issues that Koreans face in their daily lives’.
That is how Baedal Minjok started. But recently his ‘startup’ raised $36 million USD from Goldman Sachs. He concluded, "if a person like me who had no management or investment knowledge can pull it off, anyone can do it."
Part Two of this story comes out tomorrow, 9am Korean time (GST + 8)
Connecting the Dots
The question people asked the most was "How did you secure so much investment from such prestigious sources?" Prior to his recent success, he had built relationships with ‘just about every domestic VC’. No chance came for free, he explained. Our first chance lead to the second, and so on. He believes that Goldman Sachs was simply the result of the connections he had made earlier on.
Series A: 2010 Bon Angels - $300,000
Kim initially met the CEO of Bon Angels (a prominent domestic VC) as a designer and a founder. Their relationship has developed from that initial meeting to a point Kim never imagined. And now Bon Angels is one of the key investors that has helped Kim build the financial planning back bone of his company. Kim sees Bon Angels as a ‘savior when Kim had nothing in his possession’. Kim explained that Bon Angels have become a trusted running mate as the company grew, faced fresh challenges, raised additional capital and continues to grow as more than a domestic food delivery brand.
Series B: 2012, Altos Ventures, Stone Bridge Capital, IMM Investment - $2.2 million USD
Kim’s relationship with Bon Angels lead to into contact with Han Kim, Korea’s representative from Altos Ventures (a Silicon Valley VC firm with a strong Korean interest). Han Kim was initially interested in the service but was hesitant to fund. At that point, Altos Ventures had an interest in both Delivery Hero's ‘Yogiyo’ and Woowa Bros (Kim’s company that built Baedal Minjeok). But after Kim was able to demonstrate six months of rapid growth, Altos Ventures joined their series B round of funding. Also joining that round were Stone Bridge Capital and IMM investment.
Now, realizing the potential of his company, Kim began serious planning for future expansion and growth with his new VCs. Il-hwan Kim representative of Stone Bridge Capital gave crucial advice about Kim’s global expansion strategy and IMM investment paved the administrative route towards Series C.
Series C: Altos Ventures, Stone Bridge Capital, IMM Investment and Cyber Agent - $12 Millionn USD
Once Yogiyo (now Baedal Minjeok’s chief local competitor) landed in Korea, they progressed with an aggressive campaign of TV commercials, to gain brand presence. In fact, the campaign was so successful that when Kim spoke about his company with new connections, their response was often; “Ah, so it’s like Yogiyo?” Kim realized quickly that his first mover advantage was being undermined by a more active competitor. In order to regain the upper hand he worked with previous investment partners to execute the next stage of his company’s growth.
Despite their success, many VCs they approached felt that Woowa Bros. valuations were too inflated. In short they struggled to find VCs domestically that could help them get to the next level. However, thanks to their growing network of previous investors they were able to connect with Cyber Agent from Japan, also an expert in marketing.
With their new partners, their advertising campaign was adjusted to reflect the needs of different market segments more accurately. Following recommendations, they pursued more targeted campaigns, such as: "New fall item - Burgundy marinated chicken," in a fashion magazine. Another targeted a finance magazine: "As your stock prices rise, you may want to spend it on chicken.” A font designed in-house, along with integrated Ad material and a celebrity-driven Ad campaign brought in three advertising awards in a single year.
Series C investment thus proved a vital step towards raising the value of the Baedal Minjeok brand.
Part Two comes out tomorrow, 9am Korean time (GST + 8)