[StartupRecipe] Female-led Startup Growth Stalled by Funding Freeze

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#Weekly Funding Overview

[April. 15 ~ April. 19]

The total funds raised by Korean startups of the week is KRW 135.4 Billion.

Company	Inudustry	Amount	Round	Investors
Bizplay	Expense management	3 billion		Yanolja
Paradigm Shift	Social media for mom	400 million	Seed Bridge	Seoul Techno Holdings, Bass Investment
Upstage	AI	100 billion	Series B	SK Networks, KT, Korea Development Bank, Shinhan Venture Investment, Hana Ventures, Mirae Asset Venture Investment, Industrial Bank, SBVA, Primer, Company K Partners, Premier Partners
Adler	3D engine	500 million	Seed Bridge	Kakao Investment
Daanbio	Bio	-	Grant	Scaleup TIPS
Personaai	AI	-	Pre IPO	Mirae Asset Venture Investment, KB Securities, Korea Investment Partners
Nextcnc	B2B cafe	-	M&A	Wefun
Heps	Hydrogen fuel	1.2 billion
The goodsystem	Heat dissipating substrate	7 billion		Mirae Asset Venture, BSK Invest, Timefolio Asset Management
Shunytech	Smart fish farming	200 million	Seed	Kingsley Ventures
Deende	Japan Cartoon	-	Pre-Seed	The Ventures, Kingsley Ventures
Stylebot	AI fashion	-		Idea Bridge Partners
Ettifos	V2X Solution	8 billion	Series A	LB Investment, Korea Development Bank
CCmediaService	Bigdata	-	Series B	KB Securities, BNK Investment & Securities, Hi Investment & Securities, KakaoPay Securities
Uncommon home	Hair care brand	-	Pre-Series A	Bass Investment, Mashup Ventures
Halfmore	Fintech	1.5 billion	Pre-Seed	Draper Associates, Krew capital
Goi funeral lab		2.5 billion	Pre-Series A	Fast Ventures, Kakao Ventures, Kodit
Apollon	Healthcare	2.3 billion	Pre-Series A	KB Investment, Stick Ventures, Behigh Investment, Mirae holdings
Glorang	Edutech	-	Series A	TBS
Moreturn	Fintech	-		The Ventures
Tessa	Art tech	8.8 billion	Series A2	Kiwoom Securities, Kyobo Securities, Eco Investment Partners

#Major Funding

• AI startup Upstage secured 100 billion won in funding, bringing its total accumulated investment to 140 billion won. The company provides document and unstructured data digitalization solutions (‘Document AI’) and its own pre-trained large language model (LLM) Sola service. Upstage plans to use the investment to expand its presence in the global generative AI market.
• Art tech company Tessa secured 8.8 billion won in funding to build a platform that allows fractional investment in global blue-chip artworks. The company aims to not only revolutionize fractional art investment but also become a leader in the STO market by securitizing various assets.

#Trend Analysis

Female Startup Growth Stalled by Funding Freeze

South Korea’s startup scene is experiencing a slowdown in investments, female-founded startups are feeling the pinch.In the first quarter of 2024, they secured only KRW 23 billion, a meager 2% of the total investment volume. This compares favorably to the same period in 2023. However, only one company, Algocare (KRW15 billion), raised more than KRW10 billion. Despite a modest increase in the total funding amount for female-led startups, all recipients were early-stage ventures, primarily seeking Pre-Series A funding. This lack of large-scale investments raises concerns about their ability to transition to later growth stages, where securing funding becomes even more challenging.

2021 and 2022 were golden years for women-led startups. Funding surged by 176% in 2021 compared to 2020, with Kurly achieving unicorn status and symbolizing success in traditionally female-dominated sectors like childcare and education. However, a market contraction in Q1 2022 led to an overall decline in investment, disproportionately impacting female-founded companies seeking Series B funding or higher. The percentage of such startups securing larger deals(SeriesB~)has steadily decreased: 17.8% in 2021, 8.5% in 2022, and just 7.9% in Q1 2024.

Several previously promising companies, like Cleaninglab, Washswat, and Bigc, have gone silent in recent years. Onul hoi, once hailed as the “next Kurly,” has even shut down. While increased sales or internal cost-cutting measures might explain the lack of follow-up investments for some, the B2C space typically relies heavily on funding for customer acquisition and growth.

The South Korean startup ecosystem has undoubtedly benefited from the growing diversity and success of female-founded ventures. However, the stark funding gap at later stages raises questions about their long-term viability. Measures and support are crucial to bridge this gap and ensure these companies can flourish.