Z Venture Capital Co-Leads Habit Factory's KRW 35 billion Series D Round
Habit Factory, a Seoul, South Korea-based AI-driven fintech company, has raised KRW 35 billion in Series D funding.
The round was led by Z Venture Capital (ZVC) and Smilegate Investment, with participation from Industrial Bank of Korea, IBK Venture Investment, Kolon Investment, KB Investment, and Shinhan Venture Investment.
Z Venture Capital (ZVC) is the corporate venture capital (CVC) arm of LineYahoo (LY) Corporation. ZVC invests across all stages from seed to late-stage in global startups, focusing on areas that create synergy with its parent company’s ecosystem, particularly AI, data technologies, media, commerce, and fintech.
Smilegate Investment is a South Korean venture capital and private equity firm with a broad investment scope spanning technology, content, and traditional industries. Based in Seoul, the firm has a wide mandate covering venture capital, content, and growth capital/buyouts. Its investment scope includes tech sectors such as AI, healthcare, and e-commerce.
ZVC's Investment
South Korea's insurance market has reached approximately 250 trillion won in scale, accounting for about 10% of the country's Gross Domestic Product (GDP). However, despite this enormous market size, the industry faces challenges such as inefficiency and slow digitalization.
In particular, the insurance agency business relies on fragmented networks of individual brokers, resulting in high information asymmetry. As a result, even in today's AI era, pushy product sales are rampant, and consumer trust cannot be said to be particularly high.
Especially, younger generations of digital natives seek fair, seamless, and efficient experiences, but the current market structure cannot adequately meet these needs.
Habit Factory is redefining this paradigm. By completely digitalizing the insurance sales process through data and AI, the company has achieved three notable innovations in the market:
- Workflow automation through data and AI
- Non-face-to-face sales process completed through KakaoTalk
- Organized sales structure with dedicated advisors
Having proven its model in South Korea, Habit Factory is currently working to eliminate inefficiencies in the U.S. residential mortgage brokerage market, and aims to become a global fintech disruptor with plans to expand into the Japanese market in the future.
Investment Rationale
- South Korea's leading end-to-end fully digitalized insurance agency model: While many insurance agencies rely on expanding personnel, Habit Factory has digitalized the entire insurance sales process in an advanced manner for the industry. The results are remarkable, with productivity per advisor approximately 5 times the average of South Korea's top 10 general agencies, significantly exceeding industry standards. This is a rare example of digital transformation in the conservative insurance industry, and we evaluate it as a competitive advantage that supports the company's sustainable and scalable growth.
- Strong leadership with next-generation customers: The company has strong support from digital native generations (mainly those in their 20s and 30s) who value transparency, data-driven proposals, and seamless digital experiences. As this customer base grows, lifetime value will increase significantly, and advantages from strong brand loyalty and early customer acquisition can be expected. By gaining this trust, the company has established a solid growth foundation to lead future insurance consumption cycles.
- Growth momentum in global markets: The company has already demonstrated profitability and scalability in South Korea and is showing strong early growth in the U.S. market as well. This proves the potential for cross-border expansion. Looking ahead, the company plans to expand into the Japanese market (which is larger than South Korea with greater room for digitalization) and expects international growth by optimizing its digital-first model.
Norbert Gehrke
