SK Telecom Americas (SKTA), the US-based business development and venture capital unit of South Korean telecommunications company SK Telecom, has launched a new accelerator – the SKTA Innovation Accelerator – with a mission is to “put the silicon back in Silicon Valley” by funding the data center and core technologies needed for modern computing.
“Over the past decade, venture capital funding has swung to software and cloud services, and it’s no longer in vogue for VCs to invest in core technologies,” said Min Park, president of SK Telecom Americas. “We created SKTA Innovation Accelerator to fill this critical void in the technology ecosystem by pioneering a new funding model that brings financial velocity to IT infrastructure startups by enabling a quick path from concept to exit. Our model simultaneously de-risks the investment for initial investors and founders, and gives strategic partners early insight into new technologies that can rapidly fill holes in their product portfolio or empower them to enter new markets.”
The accelerator aims to matchmake participating startups with strategic partners, who will be market leaders in their respective segments, and who will provide technical and market-related guidance. The accelerator will also provide funding of up to $1 million, professional services, facilities and tools.
After a seed phase of 6 – 12 months, projects that display the most potential are chosen to receive series A funding, after which there are two possible paths: ‘spin-in’, which is an acquisition by the strategic partner; or additional funding from traditional venture capital source. Entrepreneurs may be offered a guaranteed exit path, with a set exit valuation range for completing the milestones they themselves negotiate prior to beginning their project: this guaranteed exit is offered to those startups chosen to participate in the spin-in path.
David Lee, venture partner to SK Telekom Ventures and managing partner of SV Angel, said: “This new accelerator has flipped the VC funding model on its head to make it financially viable for entrepreneurs and VCs to grow the next wave of hardware-based technologies.”