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[StartupRecipe] Series A Funding Surge Positive for K-Startups, Not Full Recovery

#Weekly Funding Overview

[May. 20~ May. 24]

The total funds raised by Korean startups of the week is KRW 74.85 Billion.

arobotHumanoid robotics3.5 billionSeedHana Ventures, SGC Partners, Gauss Capital Management
WorknjoyCollaboration tool2 billionEAST GATE PARTNERS, Quantum Ventures Korea
Zetic.aiServerless AI-SeedKorea Investment Accelerator, The Ventures
MVNTDance IP-SeedMeshup Ventures
Neuracle ScienceBio7.6 billionPre IPOQuad Asset Management, Susung asset, Arche Investment
Standard EnergyESS25 billionLB Investment, Kiwoom PE, Dongyu Technology Investment
Stars techEco deicer15 billionSeries CPosco Capital, Kiwoom Investment, KB Investment, BNK Venture Investment, Hanwha Investment & Securities, Mason Capital, CACTUS Private Equity
KODADigital Asset-Pre-Series AHashed, Altos Ventures
Mr.papaFood tech3 billionSeries ABNK Venture Investment, Prologue Ventures
IOPSSatellite Operation Control System-Pre IPOCompanyK Partners
Next paymentsFintech4.25 billionSeries ANvestor, Miracle lab, Korea Alternative Investment Asset Management
VENDITAccommodation solution8 billionPre-Series AKOSMES, Space Time Investment, Life Asset Managemen
BTEHydrogen Charger6.5 billionD3Jubilee Partners, Lighthouse Combine Investment, Behigh Investment, KB Securities, Woori Venture Partners, IBK, BNK Venture Investment
ExitersFitness-SeedThe playbour

#Major Funding

  • Standard Energy, an energy storage solutions (ESS) company, has completed a 25 billion won investment with a valuation of 50 billion won. The company develops vanadium ion battery-based ESS, which are known for their safety benefits and long lifespan.
  • Starstech, a company developing diatom-based de-icers, has secured a 15 billion won investment. The company’s product effectively reduces indirect costs associated with snow removal by up to 90% and excels in preventing iron corrosion and concrete damage.
  • Vendit, an operator of hotel automation solutions, has secured 8 billion won in investment. As of May 2024, over 500 hotels have adopted Vendit’s solutions. The investment will be used to enhance the company’s CMS and PMS.

#Trend Analysis

Series A Funding Surge Positive for Korean Startups, Not Full Recovery

The government released the Korean startup investment trend for the first quarter of 2024, assessing that it will continue to grow throughout the year. While Startuprecipe’s monthly investment data doesn’t show significant drops from month to month, it can’t be called a recovery either, as there are no significant gains. Overall, the investment levels are still far below the record-breaking figures of 2021, with no signs of returning to those heights soon. However, a positive indicator is the increase in the average investment amount for Series A stage companies. For startups looking to scale beyond the seed stage, successful Series A investment is the crucial first gateway to a sustainable business. Therefore, the improving Series A investment environment is likely to have a positive impact going forward.

Looking at the funding raised by Series A stage companies in Q1 2024, the total amount of Series A funding increased by 15% year-on-year to KRW 218.1 billion, and the average investment amount increased by over KRW 2 billion quarter-on-quarter. Compared to Q4 2023, the total Series A funding rose by 44%, and the average investment amount increased by more than KRW 2 billion, indicating a positive start to the year compared to the previous one.

Notably, the highest Series A funding amount reached KRW 30 billion, surpassing the KRW 14 billion mark in the same period last year. The average amount of Series A investments from April to May 26 has already exceeded the Q1 figure, suggesting more money is expected to flow into Series A funding in Q2.

The healthcare/bio sector is leading the rise in Series A investments. As of May 26, 33% of all Series A funding went to this sector, primarily AI-driven healthcare companies. Manufacturing companies, including robotics, also attracted significant early-stage funding.

In terms of funding size, robotics, beauty/fashion platforms, and AI healthcare companies were the most successful in raising more than KRW 10 billion at the Series A stage. Software startups, one of the most popular investment sectors, were chosen by more investors at Series A and later stages. In terms of deal count, consumer tech was the center of attention, with fashion/beauty/food e-commerce remaining strong at the early stage.

While Q1 startup investments show a positive trend, it’s not a clear recovery as the government forecast. However, the increase in Series A stage investments, the rise of the healthcare/bio sector, and the growth in the number of companies raising KRW 10 billion at Series A are positive indicators and bode well for startups that experienced an investment drought last year.

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