Samsung has set up a new $100 million venture fund and organization in Silicon Valley to support early-stage innovation.
Based in Menlo Park, the new Samsung Strategy and Innovation Center plans to invest in the development of components such as displays and silicon subsystems. The center's Catalyst Fund will focus on supporting "entrepreneurs, academics and artists," said Young Sohn, who heads the new organization.
The moves are an effort to address what South Korea-based Samsung sees as a shortfall in the venture capital market, said Sohn. Venture capital firms have shied away from investing in early-stage ideas of late, he said, instead focusing more on late-stage companies.
"They're not doing what we'd like to see happening in the early stages," he said. "We want to get the wind behind" entrepreneurs and academics. "We want to make sure we help their progress."
The investment in hardware is unusual. In the fourth quarter, just 2 percent of the venture capital invested in Silicon Valley went to electronics hardware companies, according to the National Venture Capital Association. Another 2 percent went to semiconductor investments. By contrast, some 39 percent went to software companies.
The center's Menlo Park office serves as its headquarters, with satellite offices in South Korea and Israel. Sohn said Samsung is considering opening innovation
center offices in tech centers such as Boston, Austin and Cambridge, U.K.
Sohn said the innovation center, which is already open, will work hand-in-hand with Samsung's Ventures America Fund, which has $1 billion in assets, as well as other parts of Samsung's business. Samsung can offer entrepreneurs not only money to explore their ideas, but later-stage funding and a "platform" to potentially incorporate, market and manufacture products derived from them.
Sohn declined to say when, exactly, Samsung opened the innovation center or how many employees it has.
Samsung Aims at innovation
The Korean electronics giant announced a new fund and organization in Silicon Valley to spur early-stage tech development
Showing the money: Samsung is setting aside $100 million for its new Catalyst Fund. That's in addition to the $1 billion in assets it already has devoted to its Samsung Ventures America Fund. Starting early: The new fund will focus on encouraging new technology, ideas and entrepreneurs early in their development cycle. Helping hardware: The fund will focus on hardware, specifically on components and subsystems. Getting organized: The company has created a Strategy and Innovation Center, based in Menlo Park, that will oversee the fund. The new center will oversee offices in Korea, Israel and other places in the future.
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