South Korea aims for startup gold


by DailyPost 45 Views 0

Again in 2011, when South Korea gained its longshot bid to host the 2018 Winter Olympics, the nation wasn’t widely 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 subsequent 10 days, the eyes of the world can 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 dollars yearly has gone to seed via late-stage funding rounds for the previous few years. Throughout that point, at the least two corporations, e-commerce firm Coupang and mobile-focused content material and commerce firm Yello Mobile, have established multi-billion-dollar valuations.

To offer a broader image of how South Korea stacks up when it comes to attracting startup funding and constructing scalable corporations, Crunchbase Information put collectively a knowledge dive taking a look at funding totals, vital investments, exits and lively buyers.

Listed here 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 dollars 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 via 2018:

Massive, later-stage rounds pushed up the totals. Prior to now 4 years, greater than two dozen companies have closed financings of $10 million or extra, together with a number of unicorns for considerably bigger sums. A type of, Coupang, has raised $1.4 billion from enterprise and personal fairness buyers up to now.

Totals have trended decrease prior to now couple of years, which can be attributed to fewer big rounds. For example, 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 large checks from each home and abroad buyers.

The most important single funding up to now yr went to TMON (brief 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 offered an exit to early buyers years in the past. Coupon website LivingSocial purchased the corporate in 2011, then bought 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 well-liked selfie apps, which raised $50 million. Within the chart under, we take a look at these and different vital financings from 2017 by way of at this time:

The listing of prime funding recipients consists of a mixture of startups targeted principally on the Korean market and people attracting a broad worldwide consumer base.

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

However Korea additionally has a document of build up main international corporations, like Samsung, LG and Hyundai, to call the most effective recognized. So it’s not shocking to see corporations with international ambitions among the many prime startups. In recent times, the main Korean search engine, Naver, particularly, has been profitable launching startups with international attain. The agency is a majority proprietor of the Japan-headquartered messaging app LINE, which went public final yr and is valued at almost $10 billion. Line and Naver are also majority owners of Snow.

It’s additionally potential to start out native and later go international. On this camp is Viva Republica, a developer of a fast-growing cellular funds software Toss, which acquired preliminary traction in Korea and is now setting its sights on enlargement overseas.

Enjoying to win

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

Quite a lot of companies are repeat buyers. Among the many most lively are Samsung, Altos VenturesSoftBank Ventures KoreaFormation 8 (now Formation Group and 8VC), 500 Startups and Anchor Equity Partners.

The whole pool of buyers is far deeper, nevertheless. Crunchbase knowledge exhibits that greater than 150 angel, seed, incubator and VC and company enterprise buyers have participated in funding rounds for Korea-based corporations over the previous 5 years.

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

Featured Picture: iStockPhoto / Greens87