[StartupRecipe] Startup M&A deals boom in Korea

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#Weekly Funding Overview

[May. 17 ~ May. 21 ]

The total funds raised by Korean startups of this week is KRW 162.2 billion.

Company	Industry	Amount	Round	Investors
Logispot	Logistics	15 billion	Series C	Korea Development Bank, Duzon Bizon
Holostanding	Prophtech	-	Seed	Kyungdong Investment
Firmmit	Smart farm	1 billion	Pre-Series A	Korea Investment Partner, Bigbang Angels
Styleshare	Fashion	300 billion	M&A	Musinsa
Teamblind	Community	41.6 billion	Series C	Storm Ventures, DCM Ventures, Main Street Investment, Cisco Investment, Pavilion Capital
Sparkplus	Coworking space	20 billion	Mirae Asset Group
Quarterback Group	Fintech	6.5 billion	Series A	KB Investment, Mirae Asset Venture Investment, The Seed Investment
IR Kudos	SaaS	3 billion		Korea Investment Partners, RYUKYUNG PSG, DB Financial Investment, Hwacheon
Waddle	Shopping app	100 million	Seed	11th Street
YLP	Logistics	79 billion	M&A	Tmap Mobility
Knowmerce	Online class	10 billion	Series B	KTB Network, Korea Investment Partners, Megastudy, Dunamu & Partners, TIGRIS investment, Korea Investment PE
Liveanywhere		-	Pre-Series A	Bluepoint Partners, Strong Ventures, GI Equity
EVR Studio	Game	10 billion
Akuodigital	SaaS	10 billion	Series B	Capstone Partners, KDB Capital, KB Securities
Panolos bio science	Bio/Healthcare	2 billion	Series A	OCI, Cloudib Investment, UTC Investment, Kclavis Investment, JL Partners
Deepx	AI Semiconductor	21 billion	Series B	MAGNA Investment, Capstone Partners, Pathfinder H, Korea Development Bank, SJ Investment Partners, SJ Investment Partners, Shinhan Capital, DS Asset Management
ALLT		-	Seed	CNT Tech
Paran Energy	Energy	1 billion		D3Jubilee Partners
Pozalabs	Music	-		Naver D2SF
Ninetosix	Shoes	-	Seed	CNT Tech
Openedge Technology	Semiconductor IP	3 billion		SK Group

Major Funding

• Teamblind, an anonymous community at work, has succeeded in finalizing a $3.7 billion Series C investment. With this investment, Teamblind plans to accelerate its plan to be listed on NASDAQ by 2025.
• Coworking Space SparkPlus has raised KRW 20 billion investment from Mirae Asset Group. With this investment, the company aims to become a comprehensive real estate operator by establishing itself as a corporate platform that supports remote work for companies.
• SparkPlus has raised KRW 20 billion investment from Mirae Asset Group. With this investment, the company aims to become a comprehensive real estate operator by establishing itself as a corporate platform that supports remote work for companies.
• Wonderwall, which provides artist content, has secured KRW 10 billion worth of investment. Wonderwall provides more than 200 courses provided by artists such as actors, rappers, and singers and also sells artist products.

#Trend Analysis

Startup M&A deals boom in Korea

The Korean startup M&A market is hotter than ever. Earlier this year, Match.com’s acquisition of HyperConnect for $1.725 billion sparked a flare, and at least one significant acquisition is reported every month.

Unprecedented M&A in the fashion platform sector, in particular, has been taking place this year. As existing fashion giants seek to collaborate with fashion platforms that captivated the MZ generation as a way to recover their sluggish performance, they are continuing to take over beyond strategic investment and cooperation. As demand for online shopping increases due to covid, the number of online platform acquisitions is increasing.

Shinsegae’s SSG.com acquired W Concept for KWR 265 billion, while Kakao, strengthening its e-commerce sector, also acquired fashion platform Croquis.com (Zigzag). Zigzag, established in 2016, is a startup that is expected to attain the ‘unicorn’ status, and with this acquisition by Kakao, it will attempt to enter the global market.

The most recent acquisition is Korea’s No. 1 fashion platform, Musinsa, which acquired the women’s fashion commerce Styleshare/29CM for KRW 300 billion. This is an example of a unicorn startup taking over another startup. Through this acquisition, Musinsa will secure women’s fashion customers and promote the overseas expansion of domestic brands along with StyleShare.

Recently, acquisition cases have emerged in the content IP field, which is hot worldwide. Kakao acquired the web novel platform Radish and the webtoon platform Tapas Media for KRW 500 billion and KRW 600 billion, respectively, to secure competitiveness in the global market. It is planning to secure content IP and supply K-content worldwide by acquiring South Korean startups that already influence global markets.

It is noteworthy that Korean conglomerates looked at startups as targets for simple cooperation or support in the past. Now they are going beyond investment to absorb startups to respond to the rapidly changing market. Over the years, there were concerns that the Korean M&A market needs to expand for the sake of a virtuous cycle of the startup ecosystem. This argument gained more strength in 2019 when Elegant Brothers was sold to the German company Delivery Hero for KRW 4 trillion. It was pointed out that although the company was founded in Korea, ultimately, there is a limit that the company cannot grow without the influence of foreign capital.

However, the market is rapidly changing due to the recent increase in large companies seeking to acquire startups, which is seen as a very positive sign for startups. The Korean government also plans to create a KRW 100 billion M&A fund to build a venture ecosystem in which investment, recovery, and re-investment are in a virtuous cycle and actively continue the boom that has been blowing in the M&A market.