South Korea goals for startup gold


Again in 2011, when South Korea received its longshot bid to host the 2018 Winter Olympics, the nation wasn’t well known as a vacation spot for ski and snow lovers. It wasn’t thought-about a lot of a tech startup hub both.

Quick ahead seven years and rather a lot has modified. For the following 10 days, the eyes of the world will probably be on the snowy slopes of PyeongChang. In the meantime, a few hours away in Seoul, a burgeoning startup scene is seeing investments multiply, producing exits and even making a unicorn or two.

Whereas South Korea doesn’t get an ideal rating as a startup innovation hub, it has established itself as a critical contender. Greater than half a billion yearly has gone to seed by means of late-stage funding rounds for the previous few years. Throughout that point, at the very least two firms, e-commerce firm Coupang and mobile-focused content material and commerce firm Yello Cellular, have established multi-billion-dollar valuations.

To offer a broader image of how South Korea stacks up by way of attracting startup funding and constructing scalable firms, Crunchbase Information put collectively a knowledge dive taking a look at funding totals, important investments, exits and energetic traders.

Listed below are a few of our findings.

A quick rise

Enterprise funding for South Korean startups began to take off in 2014, per Crunchbase knowledge. Beforehand, enterprise funding rounds that made it into the database solely totaled within the tens of hundreds of thousands of yearly. However about 4 years in the past, the numbers began rising dramatically.

Within the chart under, we take a look at the annual totals from 2010 by means of 2018:

Massive, later-stage rounds pushed up the totals. Up to now 4 years, greater than two dozen firms have closed financings of $10 million or extra, together with just a few unicorns for considerably bigger sums. A kind of, Coupang, has raised $1.four billion from enterprise and personal fairness traders so far.

Totals have trended decrease previously couple of years, which can be attributed to fewer large rounds. As an illustration, greater than half of the 2015 complete got here from a $1 billion SoftBank funding in Coupang.

Rising startups

Whereas totals are down some over the previous few quarters, South Korean startups have continued to draw consideration and massive checks from each home and abroad traders.

The biggest single funding previously 12 months went to TMON (quick for Ticket Monster), which raised $115 million final April at a reported $1.four billion valuation. That is the second time scaling up with progress funding, because the Seoul-based firm already supplied an exit to early traders years in the past. Coupon website LivingSocial purchased the corporate in 2011, then offered itself to Groupon, which then spun out the Korean firm.

After TMON, the next-biggest funding rounds have been for journey website Yanolja, which raised $55 million, and Snow, developer of fashionable selfie apps, which raised $50 million. Within the chart under, we take a look at these and different important financings from 2017 by means of in the present day:

The checklist of high funding recipients consists of a mixture of startups centered principally on the Korean market and people attracting a broad worldwide consumer base.

Firms centered on the home market discover that Korea, with 50 million inhabitants and a extremely urbanized, tech-savvy buyer base, is large enough to assist massively scalable companies. These in that camp embrace TMON and Coupang.

However Korea additionally has a file of increase main world firms, like Samsung, LG and Hyundai, to call one of the best recognized. So it’s not stunning to see firms with world ambitions among the many high startups. Lately, the main Korean search engine, Naver, specifically, has been profitable launching startups with world attain. The agency is a majority proprietor of the Japan-headquartered messaging app LINE, which went public final 12 months and is valued at practically $10 billion. Line and Naver are additionally majority homeowners of Snow.

It’s additionally doable to start out native and later go world. On this camp is Viva Republica, a developer of a fast-growing cell funds device Toss, which received preliminary traction in Korea and is now setting its sights on growth overseas.

Taking part in to win

Korea’s startup scene is attracting a big and various assortment of traders, together with Korea-based funds, company VCs, Silicon Valley enterprise companies and others.

Quite a few companies are repeat traders. Among the many most energetic are Samsung, Altos VenturesSoftBank Ventures KoreaFormation eight (now Formation Group and 8VC), 500 Startups and Anchor Fairness Companions.

The whole pool of traders is way deeper, nonetheless. Crunchbase knowledge reveals that greater than 150 angel, seed, incubator and VC and company enterprise traders have participated in funding rounds for Korea-based firms over the previous 5 years.

In fact, not all latest bets on promising startups will prove winners. However all in all, it seems that South Korean entrepreneurs have clearly put collectively a aggressive lineup.

Featured Picture: iStockPhoto / Greens87

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