Scroll to top
© 2020, Startuprecipe theme by Rssow

[StartupRecipe] Korean M&A Market Slows in 2023, Despite Strong Start

#Weekly Funding Overview

[Oct.16 ~ Oct.20]

The total funds raised by Korean startups of this week is KRW 33.5 Billion.

ThegreetClean tech5.6 billionSeries AKorea Investment Partners, Samsung Securities, SBI Investment, GS Ventures, GS Retail, Behigh Investment, Korea Social Investment
NDmarketB2B Retail platform2 billionPre-Series, IBK, Inha University, Korea social Investment
AEONUSEnergy mobility-GrantTIPS
NanaliGame1 billionPre-Series AGaruna Investment, Kona Venture Partners
NarusecuritySecurity-LF Investment
KlleonDigital Human9.5 billionSeries ALB Investment, Samsung Venture Investment, RBW, Kakao Investment
PabloairMobility21 billionPre IPOKDB Industrial Bank of Korea, Behigh Invesment, Kiwoom, Daeshin securities, SBI Investment, Yuanta Securities, XPLO Investment, Masang Soft
AlpesAtomic layer processing-GrantTIPS
DataAdDigital marketing-M&AStorelink
KlebrainMusic note platform-GrantTIPS
MBI SolutionChatting bot-M&ALunasoft
CarbornsaurusClimate tech-GrantTIPS
OionAir cleaner-GrantTIPS
ABMLABBigdata-Pre-Series ATabangels, KODIT
JoberDocument Tech Startup-SeedCnttech-DB
IntergalacticClass platform-Seed1billionpartners, Realwesen
WatervationAir cleaner-GrantTIPS
KoworkwithusForeigner Platform-GrantTIPS
BelinkerManufacturing-SeedKorea Investment Accelerator
GenfitxGolf fitting-Seed BridgeBlitz Asset Management

Major Funding

  • Pabloair, a leading company specializing in drone control, has secured a substantial investment of 21 billion won, bringing their total accumulated investment to 43 billion won. Established in 2018, the company possesses key technologies centered around autonomous cluster flight of unmanned vehicles and integrated control systems. The investment is expected to help Pabloair expand into overseas markets, particularly with a focus on selling performance drones and entering the international drone show market.
  • The digital human startup, Klleon, has secured an investment of 9.5 billion won. After relocating its headquarters to the United States, this is its first investment. The company has developed a digital human capable of real-time conversation with just one photo of a face and 30 seconds of voice. It plans to launch services based on its intellectual property in the U.S., Japan, and Southeast Asian markets.

#Trend Analysis

Korean M&A Market Slows in 2023, Despite Strong Start

Despite the investment drought that slowed the overall market in 2022, the M&A market picked up steam with many deals made to absorb promising startups that had run out of steam. Investors predicted that M&A would continue to increase in 2023, but the outlook is less clear now.

Things seemed to be going as expected in the first quarter of 2023, with close to 30 deals, similar to the same period last year. However, the second quarter saw signs of a slowdown, with 37% fewer deals than the same period in 2022. The third quarter saw an even bigger slowdown, with 40% fewer deals than the first quarter of this year.

The biggest change in the M&A market this year is a decrease in the number of large company acquisitions and a near disappearance of unicorn startup activity. The strategy of using deep pockets to acquire startups to scale and grow businesses has disappeared. While last year saw unicorn startups such as Kurly, Zikbang, and YanolJa acquire startups as well as parts of large companies, there have been no notable unicorn startup acquisitions this year. Unicorn startups are also not getting funded, and with the investment climate slow to improve, they are being cautious with their money.

While the majority of deals were undisclosed in terms of value, the largest deal was Q10’s acquisition of Wemakeplace for KRW 150 billion, followed by the sale of shaved ice franchise Sulbing for KRW 105 billion. Notable acquisitions by publicly traded companies include KakaoPiccoma’s acquisition of AI translation service VoiceThrough for KRW 20 billion, HYBEe’s acquisition of AI audio SuperTone for KRW 45 billion, and Daeshin Securities’ acquisition of real estate piecemeal investment company Casa Korea for KRW 15 billion.

Despite the market slowdown, M&A deals between startups still account for a large share of the total. At the beginning of the year, startups such as Drama & Company, Class101, Barogo, Beauty Selection, and Leferi made acquisitions. It is common for startups looking for market leadership to acquire nascent startups or business units. However, the number of deals between startups decreased in the second half of the year, although the number of deals remained constant in the first half of the year.

By sector, consumer tech, which includes fashion/beauty brands, pets, and e-commerce, saw the most transactions. The content media sector also gained attention as companies with related technologies such as drama and content production became acquisition targets.

sign up for Startup Recipe newsletter


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

sign up for Startup Recipe newsletter