Venture funding for South Korean start-ups has reportedly started to gain traction since 2014. A significant number of Korean companies have closed financial rounds amounting to $10 million or more. The annual totals have recently raised, especially those in the period between 2014 and 2015.
Venture funding for South Korean start-ups has reportedly started to gain traction since 2014. A significant number of Korean companies have closed financial rounds amounting to $10 million or more.
According to research conducted by Crunchbase, the annual totals in the recent years has shown a huge financial jump for South Korean start-ups, especially those in the period between 2014 and 2015. In 2015, for example, seed through late-stage funding accounted for $1,810M as compared to $18M in 2010. The statistics went slightly down in 2016 ($663M), continuing the downturn up to now ($96M in 2018).
But what is the reason for the recent decrease in seed funding? One possible explanation may be the fact that there are fewer big rounds amounting to billions. One such round happened in 2010, when the e-commerce platform Coupong received the colossal $1.4B funding from private and equity investors.
Despite the fact the funding numbers went slightly down recently, there are still some big investments in South Korean companies. In the past year, another e-commerce company named TMON (Ticket Monster) reportedly attracted $115 million in funding at a valuation of $1.4 billion. Nevertheless, it is not only e-commerce services that raise a substantial amount of funding. The travel site Yanolja has recorded a substantial growth rate in the past 10 years. In particular, it is claimed to grow by 150%, which led to the company receiving funding of $61M. Following in Yanolja`s footsteps, the selfie apps creator Snow raised another $50 in January this year, making an overall of $95M.
It is interesting to note that the list goes on with companies like Viva Republica (Toss), a P2P payment app, Woowa Bros, a smartphone ad platform and apps, and the logistics technology Mesh Korea. As Crunchbase points out, the overview of the start-ups topping the ranking shows both companies that are focused on the Korean market and companies relying on a more international user base.
It seems like South Korea is a nation with a high tech penetration and 50 million potential users that could assist the scalability of any local company. However, it is also true that Korea`s start-up landscape looks attractive to investors outside of the country. It is not untrue to say that Korea-based funds are not the only ones to invest in emerging companies. For example, corporate VCs and Sillicon Valley venture companies are also showing interest in the region.