Spartan Group: "Bear Market as an Investment Opportunity... Korea Needs Web3 Regulatory Clarity"

Interview with Kelvin Koh, Co-founder of Spartan Group

"Invest in Bear Markets... Patience Wins"

Korean Web3 Market Needs Regulatory Clarity

"RWA Will Be the Next Big Thing in Web3"

Kelvin Koh, co-founder of Spartan Group, is a veteran investor in the Web3 industry. After 18 years as an analyst and executive at Goldman Sachs Asia, he founded the venture capital (VC) firm 'Spartan Group' in 2018, diving headfirst into the Web3 space.

Koh, who is experimenting with various investment strategies from thematic venture funds in decentralized finance (DeFi) and blockchain gaming to recent market-neutral strategies, emphasized, "Bear markets reveal true skills."

In an interview with Bloomingbit on the 20th, Koh shared his broad views on investment philosophy to navigate bear markets, advice for the Korean Web3 ecosystem, and the future of real-world asset tokenization (RWA).

"Bubbles Burst, but Innovation Remains... Focus on Fundamentals"

Koh stated that his investment philosophy is to "focus on fundamentals." He said, "Having experienced the Asian financial crisis, the dot-com bubble, and the global financial crisis, I learned that true innovation survives even when temporary bubbles burst."

During the 2018 cryptocurrency market crash, many investors exited, but Spartan focused on advising promising projects and launching its first fund. This was in line with his philosophy that one should not be swayed by market conditions if they find promising teams and ideas.

Since then, Spartan has built a diverse portfolio by forming thematic funds in DeFi, gaming, and infrastructure. Recently, they are preparing to launch a market-neutral strategy fund and a third venture fund, seeking returns regardless of market direction.

Koh explained, "The market-neutral strategy is something we've been considering for a long time," adding, "It reduces risk and is a structure that traditional asset investors can also be interested in." He continued, "We aim to be active partners by providing practical support such as market entry strategy advice and business development connections, not just investing funds."

Principles for Navigating Bear Markets... "The Best Time to Buy is When Others Fear"

Spartan's investment approach is described as 'contrarian.' Koh emphasized, "You need the courage to go against the market when it is fearful to succeed in investing," adding, "When others leave, it's actually an opportunity to acquire future unicorns (unlisted startups valued at over $1 billion) cheaply."

In fact, Spartan made seed investments in promising projects even during the severe downturn of 2018-2019 and has continued active post-investment management. Koh explained that they are most wary of the behavior of stopping or abandoning investments due to price crashes.

He said, "We invest with a long-term perspective. The more the recession, the more we communicate with founders and encourage product development and community building," adding, "We do not hesitate to provide support such as follow-up investments and manpower recruitment. Bear markets are rather a time to strengthen the core."

He continued, "Through this attitude, Spartan has gained a reputation as a 'trustworthy partner' among founders," adding, "In the cryptocurrency industry, patience is the key to victory."

"Korean Web3 Market Has Enough Potential... Global Scalability and Regulation Are Key"

Koh positively evaluated the potential of the Korean Web3 market, saying, "It is a very interesting market with both technological prowess and market size." He particularly saw the competitiveness of gaming and content intellectual property (IP) as capable of succeeding in the global market.

However, he pointed out the lack of accessibility to external capital and the market structure centered on centralized exchanges as disadvantages. He diagnosed, "The Korean Web3 ecosystem is not easy for external capital to enter," adding, "Regulatory uncertainty is also preventing global investment firms from entering."

He continued, "Korean investors are focused on exchange-based activities rather than on-chain ecosystems," adding, "Education and improvement of user experience are needed to bring them on-chain."

He emphasized, "Korean projects should target the global market from the start," adding, "They should actively collaborate with overseas investors and projects while targeting cryptocurrency hubs like Singapore and Hong Kong." He also pointed out that clear regulation is an important task. Koh added, "If proper guidelines are established, institutions and foreign capital can enter with confidence," adding, "This is a prerequisite for the growth of the Korean Web3."

Spartan's Bet on 'RWA'... "It Will Become the Next Big Thing"

Koh identified RWA as the next big thing in the Web3 market. RWA refers to the tokenization of real-world assets such as real estate, government bonds, gold, and stocks on the blockchain, allowing them to be traded like digital assets.

He predicted, "For traditional financial capital to enter Web3, familiar assets must first be on-chain," adding, "Soon, all assets will be traded in token form."

He also stated, "If RWA becomes active, traditional financial institutions will naturally flow into Web3, and the overall market size will grow," adding, "Spartan is also actively preparing for related startup investments and fund design."

Finally, Koh said, "Institutional participation, which was unimaginable 10 years ago, has become a reality," adding, "Of course, the market is still volatile, but Web3 has progressed with each cycle. Those who have been consistently preparing will smile in the next bull market."