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[StartupRecipe] Angel Investors’ Role Growing in the Korean Startup Funding Market

#Weekly Funding Overview

[May. 10 ~ May. 14 ]

The total funds raised by Korean startups of this week is KRW 95.85 billion.

CoffeechatCareer-SeedBon Angels Venture Partners
Life LabCleaning22 billionDS Asset Management, Lotte Accelerator, Hana Ventures, Kakao Ventures, Altos Ventures, KTB Network, Capital One
Business canvasCollaboration tool2 billionMirae Asset Venture Investment, Shinhan Capital, Nextrans
FitpleHR850 millionPre-Series ASCHMIDT, Donghoon Investment, Primer
DSRV LABSBlockchain3 billionSeries AKB Investment
VispotAI Video4 billionPre-Series ABon Angels Venture Partners, Timewise investment, Shinhan Capital, Future Play, Access Ventures
HyperithmBlockchain-Wemade Tree
TainaiFintech-Klim Ventures
Perfect-stormAR/VR-Yuanta Investment, IBK CAPITAL, NICE Investment Partners, Conar Investment
Future PlayAccelerator10 billionSeries BLG International, DB Financial Investment, FUTURERA, Hashed, Data Solution
GO2JOYAccomodation4 billionSeries ASV Investment, HB Investment, Platform Partners
IngineWave Power4 billionKorea Develpoment Bank
GBIKEE-scooter-Series BStrong Ventures, SBI Investment, Premier Partners, Yuanta Investment, Mirae Asset Venture Investment, Cymechs
Studio OriginMedia/Content5 billionSeries AMirae Asset Venture Investment, Korea Investment Partners
MedispanBio/Healthcare6.5 billionSeries ADSC Investment, TIGRIS investment, STASSETS Investment
QueenitFashion5.5 billionKakao Ventures, CompanyK Partners, Bass Investment, Klim Ventures
EmocogDigital therapeutics-Naver D2SF, Stonebridge Ventures, KaKao Ventures
EXCELLOIOT-Series AIndustrial bank of Korea, Dongyu Investment
Sky labsBio/Healthcare22.5 billionSeries BAtinum Investment, Soo Investment, Korea Investment Partners, LB Investment, KB Investment, Moru Asset Management
MedipixelBio/Healthcare6.5 billionSeries AMirae Asset Venture Investment, Mirae asset capital, Partners Investment, AI angel club, QUAD Investment Management
SeasoningBrand curation-SeedHana Ventures,KAIST Venture Investment Holdings
JchiMaterial-SeedCCEI Incheon

Major Funding

  • Life Lab, the company operating home cleaning service Cleaning Lab, has raised KRW 22 billion in investment. The company is growing rapidly with 1.8 million cumulative orders and a 200% increase in sales every year.
  • Rapport Labs, the operator of Queenit, a fashion app targeting women in their 40s and 50s, has secured KRW 5.5 billion in investment. The company achieved 1 million downloads within eight months since its launch and is planning to grow into the leading E-commerce platform for people in their 40s to 50s.
  • StudioOrigin, a character entertainment studio, raised KRW 5 billion in investment. The company plans to develop character IPs and characters that target the global market with investments and start a full-scale character IP business in 2023.
  • Go2Joy, which provides accommodation O2O services in Vietnam, raised KRW 4 billion in investment. The company plans to expand its accommodation business in Vietnam.

#Trend Analysis

Angel Investors’ Role Growing in the Korean Startup Funding Market

The formation of individual investment associations operated in Korea has exceeded 1 trillion Korean won. This is the highest amount ever since the registration system of individual investment associations took effect in May 2001. Angel investors also play a role in driving Korea’s second venture boom, with venture investments hitting new highs every year.

According to the Ministry of SMEs and Startups, the number of association funds operated by individual investment associations was KRW 1.623 trillion as of the end of March this year, and KRW 765.2 billion was invested in 2,300 companies.

An individual investment association is a combination formed by angel investors (individuals) or corporations to invest in startups and venture companies and earn profits and registered under the Venture Investment Act. Individuals or corporations can form the association, and less than 49 people must invest more than KRW 100 million in operating it for more than five years.

The number of associations continues to increase. This is due to the government’s effort to improve institutions. The government has strengthened policy support to boost investment to create a second venture boom.

First, corporations have been allowed to form associations since 2017. As a result, accelerators can create an association. Accelerators, which are required to invest 50% of their funds in early-stage businesses under three years, increased the formation of associations, and in turn, the size of funds also increased. In addition, as income deductions for individual investments expanded in 2018, more angel investors began to invest in ventures. Angel investors receive up to KRW 30 million (approx.). In addition, abundant market liquidity and easing investment requirements have boosted Korean angel investment.

Angel investors’ profiles were generally 45-year-old men living in Seoul and working in finance. The top areas they invest in are in the order of ICT services, retail, and bio.

SpoonRadio, a social audio platform, is a notable company that has succeeded in receiving investment through Angel Investment Association. The private investment association invested 300 million won in 2016 and earned back 9.6 billion won, making a 32x earnings.

The government plans to strengthen GP management and supervision functions to protect investors as the formation of associations increases while supporting the spread of the second venture boom.

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