Lotte Accelerator has since its 2016 inception become one of Korea’s most active and accomplished accelerators. They provide in-house venture capital, a nexus between startups and corporates, and L-Camp (six-month accelerator program). Lotte Accelerator is a Corporate Accelerator of Lotte Group. Investing in Seed stage startups.
Korea’s 170 accelerators/incubators make it one of the startup ecosystem’s most competitive.
“What makes Lotte Accelerator a cut above the rest, is no other Korean startup investor has as comprehensive program as ours”, is how Jong Hoon Lee, the Head of Investment, puts it.
Korea’s Top Accelerator
Lotte’s vision of becoming Korea’s top accelerator ultimately led to Jong Hoon Lee leaving a distinguished academic and venture capital career.
“Lotte group was setting up its first startup fund and there was not enough internal manpower, so I thought my background could play a contributing factor in developing Lotte’s in-house venture capital”.
Its $90 million “war chest”, indeed, gives it leeway to invest in numerous promising startups. In addition, L-Camp graduates like WeCook (Korea’s first shared kitchen service) received $1.5 million in funding and “Tutoring”, Korea’s most globally-renown educational app also received sizable funding.
What is more, no other Korean or for that matter few global accelerators do later-stage funding like Lotte. Therefore, the Korean startup community’s prevailing opinion that Korea’s lack of follow-on funding inhibits growth is a weakness that Lotte Accelerator addresses. Furthermore, Lotte Accelerator believes mentoring and networking alone cannot facilitate a startup’s success. Therefore funding is the linchpin for an optimal outcome—without follow-on funding, “how can our graduates grow and expand their startups without sufficient funding”.
A Nexus Between Startups and Corporates
Lotte’s nexus between startups and corporates seems to be difficult to replicate. Therefore, a common complaint among Korean startups participating in accelerator programs is their lack of conglomerate network. One of Lotte’s main missions is linking startups with its numerous subsidiaries through open innovation. Jong Hoon Lee describes Lotte’s mission in the following way:
“By growing startups and adding innovation to Lotte group we are creating a symbiotic relationship where startups bring innovative know-how and Lotte Accelerator mentors and connect them with our numerous subsidiaries”.
L-Camp – Accelerator Program in Korea
L-Camp is a 6-month accelerator program to help startups in need of subsequent investments. Lotte Accelerator is able to leverage its affiliates to measure the marketability of the startups through collaborations. This enables more investments and business cooperation for startups in the program. History shows that startups in L-Camp increased in value by over 90%. In addition, the number of employees increased by over 85% and follow-up investment increased by over 60%.
Some of the Benefits of L-Camp include:
- Free office space
- Access to meeting rooms, event halls, and IT infrastructure
- Free support for legal, accounting, tax advice, and etc.
- Bank-linked financial service
- Global IT infrastructure support
- Free video production support for promotion through their social media
- Business connections with affiliated companies
- Follow-up investor relations support
- Various lecture program operation
- Access to external mentoring expert pool
To be sure, L-Camp graduate “Now Pick” (24-hour rocket delivery service) best exemplifies Lotte Accelerator’s hyper-connectivity when they recognized Now Pick’s potential convergence with its electronics retail affiliate, HIMART. Since consummating an exclusive contract with HIMART last year, Now Pick’s fortunes have grown with the addition of a similar deal with E-mart earlier this month.
Is L-Camp too good to be true? No. However, as a caveat to potential applicants, Lotte Accelerator has the most competitive acceptance rate among any Korean accelerators: Lotte Accelerator generally receives over 500 applications per cycle and accepts anywhere from 10-20 startups—their 2-4% acceptance rate compares to Y Combinator which takes roughly 3% of each batch.
Lotte Accelerator Demo Day in Busan
Lotte Accelerator hosted a demo day for their first batch of startups at L-Camp Busan. The event was a great success and brought in additional investments for the participating Korean and foreign startups. Lotte Accelerator will continue to work with the Busan government to support the Korean startup ecosystem. The L-Camp base in Busan will have 10 startups from the Busan and Gyeongnam area. The 10 startups are not just Korean startups but also startups from Hong Kong and Vietnam. Lotte Accelerator provided each startup with 20 million won, mentoring services, and free office space. In addition, they selected 10 additional startups for their 2nd batch in December.
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