[THE INVESTOR] Lotte Accelerator, a startup funding and mentoring affiliate of Lotte Group, is planning for a capital increase worth 10 billion won (US$8.5 million) possibly to reduce stakes owned by group chairman Shin Dong-bin, Maeil Business News reported on Aug. 18. 

Shin Dong-bin

The firm was launched in February last year with the aim of supporting Korean startups. Its L-Camp program offers a seed funding of 20 to 30 million, along with mentorship and office space. Thus far, some 30 startups have benefited from the program.

The firm started with an initial funding of 15 billion won. The Lotte chief himself invested 5 billion won, acquiring a 33.33 percent stake in the company.

The issue is that the chairman’s stake ownership can be subject to heightened antitrust scrutiny against unfair internal deals among affiliates.

Last year, Lotte Accelerator reported 89 million won in revenue, of which trading with its sister firm Lotte Shopping made up 74 percent or 66 million won. Regardless of the deal’s legality, Lotte seems cautious about the government’s recent push for chaebol reform.

The report said the firm aims to reduce Shin’s stake to below 20 percent – the legal limit to be exempt from the antitrust surveillance. The firm reportedly plans to attract financial investors, including private equity funds, for the capital increase.

As the nation’s big companies are expected to increasingly sell assets owned by their owners under the Moon Jae-in government, the report said, investment firms in and out of the country are likely to see more investment opportunities in Korea.



By Lee Ji-yoon (jylee@heraldcorp.com)