[StarupRecipe] The Growing Mental Health Market…What about Korea?

Access to the latest Korean startup news and startup database for free

#Weekly Funding Overview

[Oct.12~Oct. 16]

This week, 11 startups that revealed the amount of investment attracted a total of KRW 101.9 billion, including Socar’s KRW 60 billion of investment. 

Company	Industry	Amount	Round	Investors
HBsmith	Software	1 billion	Pre-Series A2	Evergreen Investment Partners, INTOPS INVESTMENT, Fin del Mundo partners, K Bridge Investmen
Noutecompany	Consumer	-		OASIS Angel Club
GhostPass	Financial Service	-		ActnerLab
Ball Mate	Consumer	1 billion
CONTROL CLOTHER	Consumer	3.3 billion	Series A	SEMA Translink Investment, Yellowdog,SangSang Ventures, DT&Investment, Colopl Next
GOPIZZA	Consumer	-		Bespin Global, HONG International
MOTOV	Software	6 billion	Series A	Shinhan Capital, Sparklabs, TBT, Altos Ventures
Qualson	Consumer	6 billion		NAVER, DSC Investment
Mentein	Consumer	-	Seed	Futureplay
SpaceRiver	Logistics	-	Seed	Bluepointpartners
petfriends	Consumer	14.5 billion		Timewise investment, STIC VENTURES, ES Investor, ID Ventures, K & Investment Partner, Murex Partners, Daehan flour
Why Dots	Bio/Healthcare	100 million		Digital Healthcare Partners
SOCAR	Transportation/Mobility	60 billion		SG PE, Songhyun Investment
Trevari	Consumer	4 billion		Altos Ventures
Directors Company	Consumer	5 billion
dreamary	Consumer	-		CNTTech
Taein Education	Consumer	-
Melixir	Consumer	1 billion	Pre-Series A	Dunamu & Partners

Major Funding

• Socar has become the first mobility unicorn startup in South Korea by attracting investments totaling KRW 60 billion. Addressing COVID-induced management issues in the early stages, performance recovery, and investment in new businesses were the keys to attracting the investment. 
• Pet-Friends has raised KRW 14.5 billion, the largest amount for a companion animal startup company. Pet-Friends runs an online website that sells food and treats for animals and has an 80% repurchase rate. The company plans to start a companion animal healthcare project in cooperation with a veterinary hospital by utilizing acquired data and customers.
• Mobility ‘infodata’ company Motov attracted investments totaling KRW 6 billion. Motov provides location-based advertisement services by installing smart media devices on taxi indicator lamps. Currently, around 600 Motov taxies are being operated in Daejeon, Incheon, and Seoul. 
• Edu-tech startup Qualson has raised KRW 6 billion and plans to expand its junior English education business and other global projects. 
• Book reading community service platform Trevari attracted KRW 4 billion of investments and plans to improve its service by hiring new workers. 
• Control Clother, operator of the clothing production platform FAAI, has raised KRW 3.3 billion. FAAI provides services so that anyone can produce clothes quickly and easily. 

More funding

In addition, HBsmith, an AI QA test automation business; Ballmate, a golf community platform targeting people in their 20s to 40s; and Melixir, a vegan cosmetics developer, attracted investments of KRW 1 billion each. Moreover, dementia prevention robot “PIO” provider WhyDots attracted investments of KRW 100 million. 

Undisclosed Funding

• Noute=Digital stationary platform
• Ghostpass=Biometric reconiction payment
• Gopizza= single person fire pot pizza company
• Metein=operator of Easy Shopping Lab, which is a home appliance shopping application
• Spaceriver= operator of WMS Nosnos;
• Dreamary=hair designer matching platform
• Taein Education= an O2O platform, which searches for private education institutes

# Trend Analysis

The Growing Mental Health Market…What about Korea?

Due to COVID-19, the world’s focus is on the mental health management service. According to Pitch Book Data, investments in the U.S. mental health sector have already exceeded that of USD 1.06 billion in 2019. 

Unicorn meditation application Calm is in negotiations to attract USD 150 million and is already worth USD 2.2 billion. Lyrahealth and Mindstrong have also attracted more than USD 100 million of mega round investments. In addition, health and remote medicine provider Amwell successfully went public. 

According to a study conducted the U.S. Centers for Disease Control,  4 out of 10 Americans have mental and behavioral issues due to COVID-19. This means that COVID-19 contributed to the growth of the mental health management service market. 

What about the Korean market? Unlike other nations, there were not many startups in psychological counseling and medication that have attracted investment. The number of startups is also relatively small compared to other countries.  

Representative counseling and meditation services in Korea include Trost, Mabopractice, Kokkiri, Mindcafe, Mindground, Minding, and Lucidisland.  

This year, the largest investment was a KRW 2 billion series A investment for Humat company, operator of psychology consultation messenger. Other than this, there were no new investments in the field. Most companies have not attracted additional investment except for seed investments that were received at their founding. 

Therefore, the domestic mental health market remains in the early stages. Although the domestic market is still relatively smaller than overseas markets, more and more people are using counseling and meditation applications due to the Corona Blues. Moreover, since the medical sector and large corporations are entering the market, it is evaluated to have good marketability.  

#More news

Allowing multiple voting rights for non-listed venture startups

The Ministry of SMEs and Startups will push a measure to grant founders of companies up to ten voting rights per share at the 18^th Emergency Economic Central Task Force Meeting. The measure is to guarantee stable management of venture and startup businesses, which is often threatened due to dilution of founders’ stakes in their startups. 

The measure will allow a founder to focus on management without worrying about losing management power and help companies grow into unicorns. The number of voting rights per share can be determined through general stockholder’s meeting, but the number will be limited to ten. 

In order to introduce multiple voting rights, a company must amend the articles of incorporation with the consent of three-quarters of the total shareholders at a shareholder’s meeting. In addition, the consent of three-quarters must be obtained for major issues, such as issuing shares, quantity and price. The duration of existence of multiple voting rights is ten years, and once a company goes public, the share of multiple voting rights is converted into common stocks. 

The Ministry of SMEs and Startups plans to provide advanced legislation notice of the revised Act concerning Special Measures for the promotion of Venture Companies and submit it to the national assembly this year.