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[StartupRecipe] 40% Surge in K-Startup Funding, But Concerns remain

#Weekly Funding Overview

[May. 27~ May. 31]

The total funds raised by Korean startups of the week is KRW 94.6 Billion.

ChequerData security-Shinhan Venture Investment
ZetcitiReal time map-SeedYoonmin foundation
PotscompanyPlant brand-SeedAIangel, AIangel-CNTTech
EodingTravel tech-Hyundai Marine & Fire Insurance
Power automationRobotics3.5 billionSeries AKODIT
EYEQ LabPower Semiconductor8 billionSeries BKorea Investment Partners, Company K Partners
Well UnionSenior care-Series AMYSC, Gaia Venture Partners
CupixProptech26 billionPre Series CAtinum Invetment, IMM Investment, Stick Investment, Premier Partners, Murex Partners, Shinhan Venture Investment, Korea Investment & Securities, IBK Industrial Bank, SDB Investment, Intellian Technologies
NatureloudCommerce12 billionNice Investment Partners, Nonghyup Bank, TS Investment, KDB Capital, Coolidge Corner Investment
Losh KoreaSenior Service-Eugene Asset Management
CJKSustainable10 billionSeries BNice Investment Partners, Nonghyup Bank, TS Investment, KDB Capital, Coolidge Corner Investment Stick Ventures, Seoul Investment Partners, Intops Investment-Enlight Ventures
FreegrowIndoor Location Service1.5 billionSeries ABusan Bank
StarseedPress release Tool-Pre-SeedVenturesquare
MyIBMatching gift platform-SeedBigbang Angels
SoftconCreator-SeedOracle Ventures
NARA SPACE TechnologySpace20 billionSeries BSamsung Securities, Shinhan Venture Investment, JB Woori Capital, Korea Development Bank, T-Investment, Posco Capital, Hana Ventures, Hi Investment Partners, BNK Venture Investment
GopizzaPizza franchise13.6 billionCP All

#Major Funding

  • Cupix, a proptech company, has secured KRW 26 billion in investment. The company’s digital twin solution service uses 3D virtual reality technology to create virtual representations of indoor spaces that are indistinguishable from reality. This allows for the generation of 3D digital twins that can be used to remotely manage construction sites. The investment funds will be used to expand global sales.
  • Naraspace Technology, a small-satellite startup, has secured KRW20 billion in investment, bringing its total accumulated investment to KRW 335 billion. The company will use the investment funds to launch additional satellites to build a satellite constellation and initiate KOSDAQ listing procedures by the end of the year.
  • Gopizza, a one-person pizza chain, has raised ₩13.6 billion in investment. The company secured the investment from CP All, a distribution subsidiary of Thai conglomerate CP Group, and plans to sell its products through 7-Eleven stores in Thailand.

#Trend Analysis

40% Surge in Korean startup Funding, But Concerns remain

Korean startup funding this year is showing a distinct upward curve compared to 2023. This represents a positive environment for startups, especially when compared to last year’s investment drought. However, can this phenomenon only be viewed positively? A comparison of the investment amounts and number of deals by month and year reveals cause for concern.

First, looking at the total investment amount in the first half of 2024 (January to May), one can see that the investment amount increased by 40% compared to the same period in 2023. The monthly average investment amount this year has also increased by more than 40% compared to 2023. These figures clearly indicate an improvement in the investment environment.

However, what is noteworthy is that while the monthly number of deals has remained largely unchanged or decreased compared to the previous year, the total investment amount has increased significantly. This suggests that a few companies secured large-scale investments, and this phenomenon is likely due to the following factors:

Firstly, startups with successful track records may have secured more funding through follow-on investments. For example, MyRealTrip, which raised 75.6 billion won in early 2024, was established in 2012 and has garnered investor attention through achievements such as turning profitable during the pandemic.

Alternatively, this phenomenon could be attributed to a few large investments. Deepx (110 billion won), Upstage (100 billion won), and BearRobotics (80 billion won) fall into this category. The issue is that these investments account for a large portion of the total monthly investment amount, and the difference between the top investment and the second-largest investment is substantial. In May, when the Deepx investment took place, the second-largest funding was only 26 billion won. The months with Upstage and BearRobotics investments showed a similar pattern.

While the increase in total investment secured is positive, the concentration of large amounts of funding in a few companies and the focus of investor attention on major growth sectors or companies with high growth potential is concerning. This investment polarization could make it difficult for early-stage startups to secure funding and undermine the diversity of the overall startup ecosystem. Therefore, policy measures to address this issue may be necessary.

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