Skip to main content

South Korea aims for startup gold



Back in 2011, when South Korea won its longshot bid to host the 2018 Winter Olympics, the country wasn’t widely recognized as a destination for ski and snow lovers. It wasn’t considered much of a tech startup hub either.

Fast forward seven years and a lot has changed. For the next 10 days, the eyes of the world will be on the snowy slopes of PyeongChang. Meanwhile, a couple of hours away in Seoul, a burgeoning startup scene is seeing investments multiply, generating exits and even creating a unicorn or two.

While South Korea doesn’t get a perfect score as a startup innovation hub, it has established itself as a serious contender. More than half a billion dollars annually has gone to seed through late-stage funding rounds for the past few years. During that time, at least two companies, e-commerce company Coupang and mobile-focused content and commerce company Yello Mobile, have established multi-billion-dollar valuations.

To provide a broader picture of how South Korea stacks up in terms of attracting startup investment and building scalable companies, Crunchbase News put together a data dive looking at funding totals, significant investments, exits and active investors.

Here are some of our findings.

A fast rise
Venture funding for South Korean startups started to take off in 2014, per Crunchbase data. Previously, venture funding rounds that made it into the database only totaled in the tens of millions of dollars annually. But about four years ago, the numbers started rising dramatically.

In the chart below, we look at the annual totals from 2010 through 2018:



Big, later-stage rounds pushed up the totals. In the past four years, more than two dozen companies have closed financings of $10 million or more, including a few unicorns for substantially larger sums. One of those, Coupang, has raised $1.4 billion from venture and private equity investors to date.

Totals have trended lower in the past couple of years, which may be attributed to fewer giant rounds. For instance, more than half of the 2015 total came from a $1 billion SoftBank investment in Coupang.

Emerging startups
While totals are down some over the past few quarters, South Korean startups have continued to attract attention and big checks from both domestic and overseas investors.

The largest single funding in the past year went to TMON (short for Ticket Monster), which raised $115 million last April at a reported $1.4 billion valuation. This is the second time scaling up with growth funding, as the Seoul-based company already provided an exit to early investors years ago. Coupon site LivingSocial bought the company in 2011, then sold itself to Groupon, which then spun out the Korean company.

After TMON, the next-biggest funding rounds were for travel site Yanolja, which raised $55 million, and Snow, developer of popular selfie apps, which raised $50 million. In the chart below, we look at these and other significant financings from 2017 through today:



The list of top funding recipients includes a mix of startups focused principally on the Korean market and those attracting a broad international user base.

Companies focused on the domestic market find that Korea, with 50 million inhabitants and a highly urbanized, tech-savvy customer base, is big enough to support massively scalable businesses. Those in that camp include TMON and Coupang.

But Korea also has a record of building up major global companies, like Samsung, LG and Hyundai, to name the best known. So it’s not surprising to see companies with global ambitions among the top startups. In recent years, the leading Korean search engine, Naver, in particular, has been successful launching startups with global reach. The firm is a majority owner of the Japan-headquartered messaging app LINE, which went public last year and is valued at nearly $10 billion. Line and Naver are also majority owners of Snow.

It’s also possible to start local and later go global. In this camp is Viva Republica, a developer of a fast-growing mobile payments tool Toss, which got initial traction in Korea and is now setting its sights on expansion abroad.

Playing to win
Korea’s startup scene is attracting a large and diverse collection of investors, including Korea-based funds, corporate VCs, Silicon Valley venture firms and others.

A number of firms are repeat investors. Among the most active are Samsung, Altos Ventures, SoftBank Ventures Korea, Formation 8 (now Formation Group and 8VC), 500 Startups and Anchor Equity Partners.

The total pool of investors is much deeper, however. Crunchbase data shows that more than 150 angel, seed, incubator and VC and corporate venture investors have participated in funding rounds for Korea-based companies over the past five years.

Of course, not all recent bets on promising startups will turn out winners. But all in all, it appears that South Korean entrepreneurs have clearly put together a competitive lineup.

Comments

Popular posts from this blog

So, when will your device actually get Android Oreo?

Google officially just took the wraps off of Android Oreo, but there are still some questions left to be answered — most notably, precisely when each device will be getting the latest version of the mobile operating system. Due to Android’s openness and a variety of different factors on the manufacturing side, it’s not an easy question to answer, but we’ll break it down best we can. First the good news: If your device was enrolled in the Android Beta Program, you’ll be getting your hands on the final version of the software “soon,” according to Google. Exactly what that means remains to be seen, but rest assured that you’ll be one of of the first people outside of Google to take advantage of picture-in-picture, notification dots and the like. No big surprise, Google handsets will be the first non-beta phones to get the update. The Pixel, Nexus 5X and 6P are at the top of the list, alongside Pixel C tablet and ASUS’s Nexus Player set-top box, which will be receiving the upgrade i...

Shatterproof screens to protect smartphones

Polymer scientists at the University of Akron in Ohio have developed a transparent electrode that could change the face of smartphones, literally, by making their displays shatterproof. In a recently published paper, researchers show how a transparent layer of nanowire-based electrodes on a polymer surface could be extraordinarily tough and flexible, withstanding repeated scotch tape peeling and bending tests. This could revolutionise and replace conventional touchscreens, according to Yu Zhu, UA assistant professor of polymer science. Currently used coatings made of indium tin oxide (ITO) are more brittle, most likely to shatter, and increasingly costly to manufacture. “These two pronounced factors drive the need to substitute ITO with a cost-effective and flexible conductive transparent film,” Zhu says, adding that the new film provides the same degree of transparency as ITO, yet offers greater conductivity. The novel film retains its shape and functionality after tests i...

Get 56GB of free cloud storage in one folder!

Bring Your Box, Dropbox, Google Drive, & OneDrive All Together In One Folder With odrive! Dropbox gives you up to 16GB free.  Google Drive & Gmail give you 15GB. OneDrive gives you 15GB. Box gives you 10GB. odrive brings all your cloud storage apps together in one folder right on your desktop. Just link your Dropbox, Google Drive, Gmail, Box, and OneDrive accounts to odrive and instantly get all your files scattered everywhere in one place! You can even link multiple accounts from each app to get even more! 1. Install odrive. DOWNLOAD It's free! And available for Windows & Mac :) 3.Get all your stuff! 2. Link all your cloud storage accounts. Note:  This gives odrive permission to download your files for you. odrive doesn't store anything, we promise! OXYGEN CLOUD, INC., 1600 SEAPORT BLVD, REDWOOD CITY, CA, 94063, UNITED  ...

Facebook Messenger For Apple Watch Officially Launches

During Apple’s keynote in September, they announced that Facebook Messenger would be coming to the Apple Watch, as long as you’ve updated to watchOS 2. Well, it’s here.   You can now share things like voice clips, likes and stickers from your Apple Watch. From my experience, little interactions like this are what works best on the Watch. I’ve found that as soon as I have to do anything more than pick a person and an action, things go haywire. Sure, there’s a lot more to do with watchOS, but I’d say that 2 is lightyears ahead of what the device shipped with. When Messenger for Apple Watch was first announced, our own Josh Constine said: The more platform ubiquity Facebook Messenger can achieve, the stronger its network effect will be entrenched. Each time a friend messages you from Facebook Messenger, it draws you closer to the Facebook ecosystem. Each time they text you from SMS or another app (other than WhatsApp), it pulls you further away. That’s why despit...

How To Bring Back The Old Windows Photo Viewer As Your Default Image Viewer

When you upgraded to Windows 10, from either Windows 7 or 8.1, you must have realized that Microsoft did away with the old Windows Photo Viewer. In its place, you now get the Windows Photo App. While Windows Photo App might have its advantages like being able to edit pictures really quickly and share them online. For me, and many others, the old Windows Photo Viewer, is just straightforward, faster and we are used to it. The new Photo App takes some time getting used to, and it is just not the same as the old Windows Photo Viewer. If you upgraded from Windows 7 or 8.1 to Windows 10, you should find the Windows Photo Viewer when you right click a picture and go to the ‘Open With’ options. But if you performed a clean install of Windows 10, Microsoft has completely disabled the Windows Photo Viewer. But Geek Savanna has come across a simple hack at  Ten Forums  that will enable you to get back the Windows Photo Viewer. This hack is revealed by a guy called Edwin, wh...