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

#Weekly Funding Overview

[April. 15 ~ April. 19]

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

BizplayExpense management3 billionYanolja
Paradigm ShiftSocial media for mom400 millionSeed BridgeSeoul Techno Holdings, Bass Investment
UpstageAI100 billionSeries BSK Networks, KT, Korea Development Bank, Shinhan Venture Investment, Hana Ventures, Mirae Asset Venture Investment, Industrial Bank, SBVA, Primer, Company K Partners, Premier Partners
Adler3D engine500 millionSeed BridgeKakao Investment
DaanbioBio-GrantScaleup TIPS
PersonaaiAI-Pre IPOMirae Asset Venture Investment, KB Securities, Korea Investment Partners
NextcncB2B cafe-M&AWefun
HepsHydrogen fuel1.2 billion
The goodsystemHeat dissipating substrate7 billionMirae Asset Venture, BSK Invest, Timefolio Asset Management
ShunytechSmart fish farming200 millionSeedKingsley Ventures
DeendeJapan Cartoon-Pre-SeedThe Ventures, Kingsley Ventures
StylebotAI fashion-Idea Bridge Partners
EttifosV2X Solution8 billionSeries ALB Investment, Korea Development Bank
CCmediaServiceBigdata-Series BKB Securities, BNK Investment & Securities, Hi Investment & Securities, KakaoPay Securities
Uncommon homeHair care brand-Pre-Series ABass Investment, Mashup Ventures
HalfmoreFintech1.5 billionPre-SeedDraper Associates, Krew capital
Goi funeral lab2.5 billionPre-Series AFast Ventures, Kakao Ventures, Kodit
ApollonHealthcare2.3 billionPre-Series AKB Investment, Stick Ventures, Behigh Investment, Mirae holdings
GlorangEdutech-Series ATBS
MoreturnFintech-The Ventures
TessaArt tech8.8 billionSeries A2Kiwoom 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.

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