Welcome Financial Group's bid to acquire Inbites Ventures, a new technology business finance company, falls through [fn Market Watch]

[Financial News] Welcome Financial Group's acquisition of Inbites Ventures, a new technology business finance company, has fallen through. Although it proceeded as far as legal and accounting due diligence and showed a strong desire to acquire the company, it ultimately called off the deal. The main reason cited for the deal's collapse was that Inbites Ventures' investment history built up before it became part of the Inbites Ecosystem did not meet Welcome Financial Group's expectations.
According to investment banking (IB) industry sources on the 9th, Welcome Financial Group recently withdrew its intention to acquire Inbites Ventures from the Inbites Ecosystem. The transaction, including HealthConnect, is worth 30 billion won, but because Inbites is set to reacquire HealthConnect as part of the deal structure, the transaction is worth around 15 billion won. HealthConnect is a subsidiary in which Inbites Ventures holds a 57.8% stake. Inbites Ventures had net assets of 31.3 billion won at the end of last year.
Had Welcome Financial Group acquired Inbites Ventures, the deal would have been seen as an opportunity to generate synergies in venture capital (VC) and corporate investment after Welcome Ventures was established in 2022. Welcome Ventures is led by CEO Oh Seung-hwan.
Welcome Financial Group switched from the moneylending business to savings banking in 2014. This is all the more notable because Welcome Credit Line, part of the group, sold Welcome Capital to energy-focused company ST International. Welcome Financial Group is now actively investing, having brought Welcome Asset Management (formerly Asset One Asset Management) into the group in 2022.
A senior Welcome Financial Group official told Financial News, “The decision to abandon the acquisition of Inbites Ventures was based on an internal assessment.”
Inbites Ventures is wholly owned by its parent company, CG Invites Co., Ltd., which has been pursuing a sale. Hwawoo served as legal adviser, while Samjong KPMG handled the accounting advisory work. Inbites Ventures plans to find another prospective buyer, apart from Welcome Financial Group, soon.
Inbites Ventures traces its origins to Crystal Bio Science, a wholly owned subsidiary from the period when CG Invites Co., Ltd.'s predecessor was CrystalGenomics. It changed its name to Inbites Ventures in November 2023.
In April last year, the company shifted from a co-CEO structure, with Lee In-jae and Shin Ho-jong as co-CEOs, to Lee In-jae as sole CEO. Lee began his career at Citibank Korea, then worked at Hanbit Investment and Aventus Partners, among other firms. He also founded Listone and previously served as its CEO.
Inbites Ventures has invested in Moloco, Furiosa AI, IICOMBINED (Gentle Monster), Next Aerospace, Law&Good, Graphy, Orum Therapeutics, Davio and Mate Mobility, among others. Through the Lucky Inbites Fund No. 1, which was liquidated this past January, it fully exited its stake in KOSDAQ-listed Graphy, achieving an internal rate of return (IRR) of 103%. It fully exited about 13 months after investing in December 2014.
An IB industry source said, “Since Inbites Ventures was brought into the group as part of the 2023 acquisition of CrystalGenomics, the Inbites Ecosystem's sale of the company can be viewed positively in light of its focus on biotech and healthcare,” adding, “Given Inbites Ventures' recent portfolio and performance, the two sides' expectations did not align, but it should be able to find other prospective buyers soon.”
[email protected] Kang Gu-gwi Reporter