[StartupRecipe] Beauty Leads Korea’s 2025 M&A Market

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Beauty Leads Korea’s 2025 M&A Market

This year, South Korea’s startup merger and acquisition market focused on future technologies such as robotics and digital finance, centered around the beauty sector. As the global K-beauty craze continues, investments in small and mid-sized beauty companies have been ongoing since last year, and tech giants have absorbed companies that can accelerate their future growth.

The most notable feature of beauty M&A is that investments have increased in companies responsible for the industry value chain, including manufacturing and ODM, beyond brand acquisitions. A major player in brand acquisitions is Gudai Global, which acquired Tirtir, Laka, and Skin 1004 last year. This year, the company is showing aggressive expansion by acquiring Seryn Company and Skin Food. Global capital and private equity funds are leading large deals across the entire beauty industry value chain. Major acquisition cases include Encross (ODM), Picton (beauty brand), Mood Mate (color cosmetics brand), and Moments Company (beauty brand). Large corporations and tech giants are absorbing technology companies that can promote their future growth and synergies.

Naver has shown the most aggressive moves this year. Through its subsidiary Naver Financial, Naver acquired Dunamu, the operator of Upbit, in a deal worth 15 trillion won. This strategic merger, which aims to leap forward as a global digital financial platform by combining Naver’s AI capabilities with Dunamu’s blockchain technology, is considered the biggest deal of the year. Prior to this, Naver showed diversified investment moves by acquiring Jeungkwon Plus, an unlisted stock trading platform, while Naver Pay acquired Asil, a real estate big data platform, and Naver Z Hub acquired Yanolja F&B Solution, a restaurant industry solution provider. The acquisition of startups by large corporations is declining sharply. Unlike in the past when large corporations actively invested in startups, large deals have become rare as a conservative stance has been strengthened.

The biggest corporate acquisition this year can be seen as LG Electronics’ acquisition of Bear Robotics. LG Electronics is accelerating its attack on the commercial robot market by acquiring and absorbing the autonomous driving robot startup Bear Robotics as a subsidiary to strengthen its robot business, which it has identified as a future growth engine. Other major merger cases include Remember & Company, which was acquired by global private equity firm EQT Partners. Remember, a business networking platform, expects to expand overseas and grow as an Asian HR tech company through this acquisition.

While M&A by unicorn-level startups that were expanding through mergers is disappearing, strategic acquisitions for business expansion are still taking place. Jarvis and Villains, which operates the tax platform Samjjeom Sam, announced its leap toward becoming a comprehensive asset management platform beyond simple tax assistance by consecutively acquiring BLQ, an electronic device commerce company, and Micro Protect, an insurtech company. Lawandcompany, which operates the legal platform Lawtalk, significantly strengthened its B2B service functions for lawyer members by acquiring Lawtime Biztech, an ERP solution company for law firms.

Although the beauty industry led this year’s M&A market, the overall domestic M&A market has been losing vitality for several years. As of November this year, the number of M&A deals decreased compared to the previous year, large corporations’ conservative investment strategies are being further strengthened, and the stagnant atmosphere continues as startups also focus on strengthening internal operations rather than expansion. However, large deals are still being concluded in areas such as K-beauty’s global competitiveness and future technology sectors like AI and robotics, so a selective M&A market is expected to continue. Among these, strategic M&A by beauty startups seeking global expansion and tech companies trying to secure future growth engines such as AI, robotics, and digital finance are expected to become more active.investments.

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