[StartupRecipe] How Fashion Startups Survive Investment Downturns

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#Weekly Funding Overview

[Nov.13 ~ Nov.17]

The total funds raised by Korean startups of this week is KRW 67.25 Billion.

Company	Industry	Amount	Round	Investors
Zero X-Flow	Edutech	3.5 billion	Series A	Hana Ventures, Astone Ventures, Laguna Investments, Must Ventures
Shuru	AI	-	Grant	TIPS
Andreia	Mental Health	-	Grant	TIPS
Theaiming	Digital ad	-		Seoul Techno Holdings
Covering	Waste management	-	Pre-Series A	Korea Investment Accelerator
Lucentblock	Propfintech	15 billion	Series B	Hana Ventures, Hana Securities, Korea Development Bank, Kyobo Securities,ETRI Holdings, Seoul National University Technology Holdings
Milk Corp.	Kids Platform	-	Grant	TIPS
AirDeep	Air clean solution	-	Grant	TIPS
SLOWAVE	Sleeptech	-	Grant	Deeptech TIPS
XXSOFT	Tax	-	Pre-Series A
Deepauto	AutoML Ops	-	Seed	NaverD2SF
Lighters Company	KPOP	-	Seed	Reventures, TIPS
Dwchemical	Secondary battery recycle	-	Grant	TIPS
Hikaritour	B2B travel	-	M&A	Camore
Viceversa	AI Fashion	1.25 billion	Pre-Series A	Space Asset Managment, Thanksventures
Quatech	Robo Advisor	9 billion	Series C	NH Securities
Imprimed	Healthcare	30 billion	Series A	Softbank Ventures, Han River Partners, SK Telecom, KDB Silicon Valley, Ignite Innovation Fund, Samyang Chemical Group, Murex Partners, Byeoksan, Mayo Clinic
Career day	HR Tech	-	Grant	TIPS
Gobi	AI Creator	500 million	Pre-Seed	Klim Ventures
Huject	Energy Harvesting	1.8 billion	Series A	Korea Investment Accelerator, BlissVine Ventures, Hanyang University Holdings,, EcoPro Partners
Ingenium Therapeutics	Biotech	5.3 billion	Series A	Capstone Partners, K Ground, Daewoodang Healthcare, Laplace
Ideaocean	Robot Deeptech	-	Seed	Futureplay
Silentist	Crypto Investment	-	Grant	TIPS
Thermoeye	Thermal Imaging Solution	900 million	Pre-Series A	Industrial Bank of Korea, Korea Science & Technology holdings
Zeroxflow	Edutech	3.5 billion	Series A	Hana Ventures, Astone Ventures, Laguna Investments, Must Ventures

#Major Funding

• Impremed, an AI medicine company based in Silicon Valley, has secured KRW 300 billion in funding. The company uses AI technology to provide personalized cancer drug efficacy prediction services. It currently predicts treatment response and prognosis for dogs with blood cancer and is being used in over 250 animal hospitals across the United States.
• Lucent Block, a real estate fractional investment platform, has secured KRW 150 billion in Series B funding, bringing its total investment to KRW 340 billion. The company operates the ‘Sou’ platform, which allows users to invest in real estate in small amounts.
• Quantec, an AI automated investment solution company, has secured KRW 90 billion in funding. Through this investment, Quantec plans to integrate its robo-advisory capabilities into NH Investment & Securities’ financial platform to provide differentiated customer service.

#Trend Analysis

How Fashion Startups Survive Investment Downturns

Despite the ongoing investment downturn, the fashion and beauty industry has remained remarkably resilient. In fact, according to StartupRecipe data, as of October this year, approximately KRW 456 billion has been invested in this sector, demonstrating the industry’s strong appeal to investors.

E-commerce platforms have been at the forefront of this investment surge. Musinsa’s KRW 200 billion investment serves as a prime example of this trend. Other notable funding recipients include Cream, Ably Corporation, and Rapportlabs, all of which have successfully connected consumers with fashion brands.

Interestingly, the fashion sector has also shown remarkable stability in terms of investment scale, investment areas, and per-company investment amounts compared to other industries. This stability can be attributed to a growing emphasis on profitability among fashion startups. Companies like Able and Laforlabs have achieved notable success in this regard, demonstrating the viability of performance-oriented strategies.

The beauty industry has also witnessed significant developments, with several startups preparing for initial public offerings (IPOs). APR which achieved unicorn status this year, stands out as a prime example. APR’s global sales growth has raised expectations for a successful IPO early next year.

Vertical platforms targeting specific consumer segments, such as age-specific or gender-specific platforms, have also maintained their strength this year. A common thread among startups that have attracted substantial investments is their reliance on services powered by data and AI technology. Major fashion platforms have already been leveraging big data and AI to provide personalized recommendation services.

The integration of generative AI into various industries, including fashion, is further fueling this trend. AI is also being applied to specific fashion items, such as shoes and glasses, to optimize production processes and enhance efficiency.

Sustainable fashion has emerged as a significant trend, attracting investor attention along the way. While not directly related to IT, the popularity of Korean fashion and beauty (K-fashion and K-beauty) is propelling small Korean brands into the global market, boosting expectations for international profitability beyond domestic success.

Despite the industry’s overall resilience, the impact of the investment downturn cannot be entirely overlooked. Luxury fashion platforms, which experienced explosive growth in 2021, have not attracted significant investments this year. While these platforms secured survival funding last year, the lack of substantial investment news suggests that performance improvement efforts are still ongoing.

Furthermore, Birdview, the operator of HwaHae, which had planned to go public this year, was forced to temporarily withdraw its listing plans, indicating the need for restructuring due to failed profitability improvement efforts.

The fashion and beauty industry continues to hold immense promise for investors, owing to expectations of future growth and innovation. Beyond the domestic market, Korean fashion and beauty startups have the potential to tap into the vast global market.

However, given the intense competition among various companies for market dominance, securing differentiated competitiveness and achieving profitability will be crucial for long-term success in the foreseeable future.