500 Startups launches $15M microfund for South Korea, calls it 500 Kimchi

500 Startups today announced the launch of its latest microfund, 500 Kimchi. The US$15 million fund will target early stage startups in South Korea’s mobile space.

Tim Chae, former entrepreneur in residence at 500 Startups and a K-Pop instructor, takes the helm as 500 Kimchi’s investing partner. The announcement says a new office will be set up in Seoul soon.

500 Startups claims to be the first major accelerator and seed stage investor from Silicon Valley to set up shop in South Korea. It states:

500 will look to invest in not just companies that can succeed in the local Asian market, but through its accelerator, find and work with Korean companies that can succeed in the US and global market.

500 Startups’ previous Korean investments include video ad maker Shakr, couple’s messaging app Between/VCNC , Tapastic, Viki, CREAM, ShareON/SPIKA, and Plugger.

Even though Korea is a relatively small country by population, its high smartphone penetration rate (80 percent) and the world’s fastest internet speeds make it a top three market when it comes to mobile app downloads and revenue.

"I think the biggest challenge for investors in Korea – especially early stage – is with time to liquidity event. It’s not uncommon to see decent sized exits that provide big wins for founders as well as the early stage investors (10-times plus) within six to 24 months of founding in Silicon Valley, but because there aren’t as nearly many potential acquirers in the local Korean market, it affects everything from exit price to timing," Chae tells Tech in Asia. "This is one of the things we’re trying to address with our Korean initiatives – not just for our own portfolio companies, but for the general startup ecosystem as a whole."

Startups in Korea also have the advantage of government backing. 500 Startups states that no country in the world has more backing per capita from the government. In the next three years alone, it will invest US$3.7 billion into startups in the form of grants and other initiatives.

See: Dave McClure: 500 Startups could return to Japan within three to six months