[StartupRecipe] Physical AI Tops Korean VC Investor Preferences in 2026

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Physical AI Tops Korean VC Investor Preferences in 2026

Startup Recipe has conducted an investment preference survey targeting approximately 20 venture capital firms from Korea and overseas, covering startups from early to growth stages. Based on multiple-choice responses, the sector expected to continue receiving investment was robotics, specifically physical AI. Physical AI claimed the top position in the overall investment preference rankings and also secured first place in AI sub-sector preferences, reflecting the ongoing robotics investment boom. The investment preference order followed with AI application services, AI semiconductors, and digital healthcare, while consumer tech also showed high investor interest, particularly in fashion, beauty, and food sectors.

In contrast, software as a service, which had been a focus area for investors for some time, fell behind even the space sector, and education technology, property technology, and blockchain also ranked in the lower tiers, indicating they have significantly lost investor attention. Within AI sub-sectors, robotics and physical AI received the most selections, followed by AI application services, or vertical AI, at 10.7 percent, and AI semiconductors and hardware at 8.2 percent, forming the top three. Digital healthcare and biotechnology at 8.2 percent and manufacturing at 7.4 percent also showed strong investment prospects. Sectors that lost investor interest despite including AI keywords were property technology and blockchain, while fintech and education technology also fell in rankings, and consumer tech showed greater interest in platforms such as beauty rather than AI convergence.

Unlike last year, this year investors indicated they would expand their investments, and the key findings from the investor survey can be summarized as follows. Among respondents, 68.4 percent plan to increase their investments in 2026 compared to the previous year, while zero percent responded they would reduce investments.

Opinions on whether the ice age has ended were evenly split at 50:50, with early-stage investors responding more positively. While 79 percent of investment firms allocated more than 30 percent of their investment capital to AI, 45 percent recognized this concentration as overheating and expressed concerns.
Government AI policies were found to influence investment decisions, with this impact being greater for very early-stage investment firms at 63.6 percent, while growth-stage investment firms responded that there was no influence at all. When making investment decisions, a solid revenue model was evaluated as an important factor alongside team capability and marketability, being as crucial as technical prowess. A total of 84.2 percent of investors rated the global competitiveness of domestic startups relatively low at around 3 points, pointing to a lack of global execution capability as a limitation.

Half of the investors positively evaluated this year’s IPO and merger and acquisition environment, expressing expectations for market recovery. However, there was a warning that without market access and expansion strategies, a genuine systemic investment ice age could arrive within three years.

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