[StarupRecipe] Two Months Since the P2P Financing Act… Effect on the P2P Market?

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#Weekly Funding Overview

[Oct.19~ Oct.23]

Company	Industry	Amount	Round	Investors
essolution	Software	220 million	Pre-Series A
Santa	Education	-	Series A	Korea Investment Partners, DAEKYO INVESTMENT, POSCO CAPITAL
baglecode	Game	24 billion	Series D	KB-Stonebridge FUND, Smilegate Investment, Partners Investment
Fin Insight	Software	-	Seed	Korea Venture Investment
Safetics	Software	-	Seed	Mashupangels, NAVER D2 Startup Factory
WHYDOTS	Bio/Healthcare	-	Seed	NAVER D2 Startup Factory
buttonsoup	Real estate/Proptech	-		Breeze Investment
chaperone	Bio/Healthcare	26 billion	Series C	Smilegate Investment, Yuanta Investment, Seoul Investment Partners,POSCO CAPITAL, MOORIM CAPITAL, BNK VENTURE CAPITAL,Albatross Investment, JXPartners, NOVAHEALTHCARE
HexaFactory	Software	-	Seed	CI Partners
Onions	Bio/Healthcare	-		DAYLI Partners, NICE Investment Partners
CAR-TOOL	Transportation/Mobility	1 billion	Seed	New Paradigm Investment
Media recipe	Media/Content	-	Seed	Angels
curaum	Bio/Healthcare	2.8 billion	Series A	DAYLI Partners, CKD Venture Capital, IBK CAPITAL
peoplefund	Financial Service	28 billion		CLSA Capital partner

Major Funding

• The P2P platform PeopleFund has raised KRW 28 billion in investments from Hong Kong global financial investment organization CLSA Capital Partners. Established in 2015, PeopleFund is a fintech company offering an alternative financial platform for not only global financial institutions but also individual investors with minimum investments starting from KRW 10,000. The investment capital will be used for personal financing loans to repay existing structured products.  

• Game company Bagelcode has attracted KRW 24 billion of investment, bringing total investment earnings up to KRW 77.3 billion. Club Vegas, a social casino game developed in-house, amassed more than 7 million downloads and the company’s sales doubled compared to the same quarter last year. The company is planning to go public within a few years. 

• The following investments have recently been finalized; smart oral device creator Curaum attracted KRW 28 billion, personal medical record service Papricacare(Onions) attracted KRW 1 billion, image data information process startup ES Solution attracted KRW 220 million, Ghost Kitchen ‘shared kitchen’ company Button Soup, and Didicast(Santa) also attracted investments of an undisclosed amount.  

Undisclosed funding

• Whydots, which uses robots to provide solutions for dementia prevention, Safetics, collaborative robot safety analysis solution provider, Hexafactory, drone parachute developer, Fininsight, and Media Recipe also attracted an undisclosed amount of seed investment.  

#Trend Analysis

Two Months Since the P2P Financing Act… Effect on the P2P Market?  

Lufax, the Chinese P2P asset management platform gained attention after it applied for IPO on New York Stock Exchange on the 23^rd. If the company is listed, it will become the largest fintech IPO in the United States. The Chinese government imposed strict regulations due to the continued occurrence of P2P loan fraud. Since the market almost collapsed, Lufax has been focusing more on asset management rather than P2P loan services.  

The domestic P2P platform market, which began to grow from 2015, is also undergoing a period of upheaval. It attracted young clients with high yields and low default rates, but the situation changed after P2P companies were incorporated into the regulatory system due to The Act on Online Investment-Linked Financing and User Protection, which went into effect in August.  

The law, which was made to identify insolvent enterprises, requires P2P businesses to meet certain requirements and be registered as “P2P financial businesses.” 

However, since the requirements for registration, such as submission of an audit report, are difficult to meet, it is expected that only a handful of businesses will register. In addition, according to the Financial Supervisory Service, only 6 out of 237 companies that were asked to submit an audit report submitted the report. Moreover, despite a year-long grace period, two months after the introduction of the law, 14 companies closed down. 

It is expected that the first companies to be registered will be announced in December, and it was announced that Lendit, 8%, People fund, the leading domestic companies, are eligible for registration after completing an audit. Due to the new environment, it is expected that the market will experience turmoil for a while. However, the law will root out insolvent enterprises and foster a sound market.  

More News

• The Ministry of SMEs and Startups, The Ministry of Land, Infrastructure, and Transport, and The Ministry of Education will carry out the Campus ‘Innovation Park’ Initiative to create innovative environments by utilizing idle land on university campuses. To this end, portions of Hannam and Hanyang Universities’ ERICA campus have been designated as an urban high-tech industrial complex. The Korean government plans to complete the complex by 2022 and will foster universities as hubs for growth and innovation.   

• Startup Branch, which was established at COEX in Gangnam, Seoul on June 4 last year by the Korea International Trade Association, marked it’s 500^th day. Startup Branch was established to support the global scale-up of Korean startups. Over the past 500 days, 400 large-scale conferences, including IR and seminars, have been held as well as more than 1,000 meetings. In addition, global corporations and startups have had meetings as part of the sigature “Fortune 500 Connect” program.