Employees giving up their highly-prized, stable, and well-paid corporate careers in Korea’s tech behemoths used to be incredibly rare. But the young team at ASDTech has done exactly that, choosing to give up six-figure salaries for the excitement and promise of entrepreneurship.
Having founded ASDTech in 2013 after leaving LG Electronics, they developed their white-label cloud service, Cloudike, and are now bringing their first major clients on board. Furthermore, they just secured US$1 million from three Korean VCs to extend their capabilities, particularly in global sales. Leading the round was Bon Angels, with Coolidge Corner and The Ventures participating.
What is Cloudike?
Unlike Dropbox, which targets individual users, Cloudike is a white-label service that is licensed to mobile service providers (MSPs). Co-Founder Maksim Azorov, originally a developer at Google, explains, “For a fraction of the development cost that is typically incurred while developing a comparable service from the scratch, Cloudike offers a platform with the full range of end-user applications. These are ready to be customized to the MSP’s requirements. This is aimed at saving cost and greatly improves time-to-market.”
“Cloudike is a fully scalable solution, ready for bare-metal and cloud based installations,” co-founder SunUng says. “It could be easily deployed from scratch or organically scaled up for multi-million users. Cloudike Rapid Sync engine can handle multiple accesses from different users and devices to the shared resource with help of real-time notifications and a messaging service.”
The benefits of Cloudike and other services like it are compelling. Whereas the average Dropbox music file takes around 58 seconds to upload in Korea, KT’s cloud service, which benefits from local servers, allows for upload speeds of a similar file in only three seconds.
Cloudike’s first client was Megafon, the number two mobile operator in Russia. For the team, that was a major turning point. Gaining buy-in from a major domestic MSP provided validation of their efforts in the open market. It also began to prove that their choice to exchange security at LG for a less certain future as entrepreneurs was perhaps their best ever career decision.
Following their first success, a number of other major clients signed up. Vestel, an OEM in Turkey which lacks specialism in internet, cloud, and other software solutions, is bundling Cloudike with their devices like smartphones and tablets. Huawei, a Chinese OEM that builds storage solutions, is also a key client helping Cloudike build their reputation and global reach, especially in South America, the UAE, and other developing markets. Recently the team has also been looking at Southeast Asia and India. Not on the list of target markets are the US and Western Europe, which SunUng says he is happy to leave to Dropbox for now.
Why Cloudike will win while Dropbox flounders
Recently Dropbox has been in the press for its torrid experiences in trying to build revenue prior to its increasingly unlikely IPO. SunUng believes that these problems centre around the difficulty in monetizing a personal cloud service and acquiring users. Cloudike, however, is going straight after the mobile service providers (MSPs), who already have customers and need services like Cloudike in order to stay relevant in a rapidly changing digital environment. SunUng strongly believes that third party white-label solutions will be one of the key factors in the success of MSPs in the future.
Korea has better term sheets
Cloudike has today announced that they raised US$950,000 for a 20 percent stake in their company. Bon Angels, a renowned Korean early stage investor, led the seed round and will take a board seat, with Coolidge Corner Investment and newly formed The Ventures participating.
Cloudike approached US VCs but found that term sheet conditions offered by Korean VCs were much better. As SunUng explained, US investors wanted to control the management of the startup, requiring two board seats and up to 50 percent equity for a similarly sized investment. In contrast, the three Korean VCs have allowed Cloudike’s executive team to maintain much more control.
The financial boost will be used to strengthen sales and build additional distribution channels globally. The developer team also plans to extend their personal cloud service to business users.
Leaving LG For A Startup
SunUng and his predominantly Russian engineering team was tasked with developing cloud services for LG back in 2010, but after their funding was pulled in 2012 the team began to consider alternative ways to pursue their vision, believing that what they were developing had massive global potential.
In 2013 the original team broke away from LG Electronics, leaving corporate salaries to strike out on their own. Naturally, they were unable to bring the source code from LG, but rapidly developed a new cloud service aimed at filling a large void left by services like DropBox and Box.
“Leaving LG was a very difficult decision,” admitted SunUng. “Financially it was definitely a major risk and we have all experienced hardship. However, the founders really wanted to continue the adventure we’d started at LG. Our great enthusiasm for adventure is much more appealing than the stability offered by LG.”