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[StartupRecipe] ESG matters more than ever

#Weekly Funding Overview

[June. 7~ June. 11 ]

The total funds raised by Korean startups of this week is KRW  167.1 billion.

MOTOVMobility11 billionSeries BAltos Ventures, TBT, Korea Development Bank, ID Ventures, Mirae Asset Capital, Nau IB Capital
CarillonLegal tech-Sparklab
NewneekMedia/Content2.5 billionSeries AKakao Ventures, Shinhan Capital
Strum KoreaSaaS700 millionSeedCapstone Partners, Seed angels
PlavLuxury Fashion-SeedFast Ventures, Hashed
Moconstconstruction-HOBAN CONSTRUCTION
Exosphere labsSecurity1 billionPre-Series ADT&Investment, Colopl Next, Korea Science & Technology holdings
DisquietSocial network-SeedMashup Angels
EPKKOT COMPANYAlcohol beverage-Seedccei Gangwon, Sopoong Ventures
MedistreamKorean medicine5.5 billionSeries AKB Investment, Hana Ventures, Shinhan Ventures Investment
YipscellBio/Healthcare12 billionSeries AIntervest, Aju IB Investment, Premier Partners, HB Investment
BillionairesFintech-Seedkimgisa Company
RingleEducation10 billionSeries AMust Asset Management, One Asset managment, Xoloninvest, Moca Ventures
BarogoLast mile delivery55 billion11th Street, CJ Group, LB Investment, YG Investment,
DSRV LABSBlockchain-Samsung Next
TwinnyMobility17 billionSeries BMirae Asset Daewoo, Log Investement, IBK CAPITAL, YG Investment, IGIS Investment Partners, Pentastone Invesment
Whynot MediaMedia/Content-KDDI
Fast FiveCoworking space30 billionAarden Partners, CL Partners, Kakao Investment, Korea Develpoment Bank, TS Invesment, Korea Investment Partners, Atinum Investment
Motion labsWomen healthcare300 millionSeedThe invention lab, Insight Equity Partners
VivawaveBeauty10 billionSeries BMirae Asset Venture Investment, Premier Partners, CJ Olive young
EpopsoftEducation10 billionSeries AAtinum investment, BonAngels Venture Partners

Major Funding

  • Logistics IT platform Barogo finalized an investment in Series C worth KRW 80 billion. The company plans to establish MFC(Micro Fulfillment Center) with 11th Street and CJ Group, which are strategic investors. New businesses and delivery services will be upgraded by hiring 100 new employees.
  • Shared Office Fast Five has raised KRW 30 billion in investment, surpassing KRW 100 billion in accumulated investment. It plans to promote platform business targeting entire corporate office-related consumption expenditure such as office solution and opening of a marketplace for its members.
  • Mobility Urban Tech company Motov has raised KRW 11 billion in investment. Real-time urban data collection and location-based advertising are provided through smart media devices equipped with digital signage and about 30 IoT sensors on electronic signs on top of taxis. There are currently about 900 taxis in service.
  • Ringle, a 1:1 video English education service taught by tutors from prestigious universities, has raised KRW 10 billion in investment. The company plans to use the funds on core talent recruitment and developing both educational content and technology system.

#Trend Analysis

ESG matters more than ever

ESG management is a hot topic in Korea as ESG accounts for a large portion of corporate operations worldwide. This means that company valuations are being done based on non-financial perspectives beyond the corporate valuation method centered on financial performance, such as sales and operating profit. Interest in ESG is growing rapidly, that the industry is saying that this year marks the beginning of ESG in Korea.

Conglomerates are quickly putting forward ESG management. Eight South Korean conglomerates, including Samsung, Hyundai Motor, SK, and LG, have already set up ESG committees. Ten companies, including POSCO Energy, Hanwha Energy, and GS Energy, have also signed an Energy Alliance to develop carbon-neutral innovative technologies. IT company Kakao will also establish an ESG committee and co-create ESG funds with SK Telecom to support innovative business activities and investments. NC Soft, famous for Lineage, has also launched its ESG Steering Committee. Nexon and Netmarble are expected to start full-fledged ESG management by expanding public services through their foundations.

Startup support organizations are also strengthening their ESG support system. The Seoul Startup Hub, a startup organization under the Seoul Metropolitan Government, will cooperate with four private organizations to support ESG-specialized startups. Collaboration acceleration through collaboration with private organizations. Seoul Startup Hub has made business agreements with SK Telecom, Hanyang University, Picnic Ventures, and Woori Financial Group(Dinolab) to sponsor office space, connect investors, run capacity-building programs, and providing their network of companies.

As calls for social responsibility from financial firms have grown, the financial sector has also been actively investing in ESG startups since last year. Shinhan Bank, KB Kookmin Bank, and Woori Bank establish ESG startup categories in their acceleration programs and further strengthen investments in social ventures such as energy and the environment.

Venture capital is also increasing its impact investment as impact funds based on government funds have been created since 2018. Startups with social venture titles have recently attracted more than 10 billion won in investment, breaking the prejudice that large-scale investment is difficult for them. Reputable impact investors include D3Jubilee and HGI. D3Jubilee Partners, one of Korea’s first-generation impact investors, recently started operating a 15 billion won fund to support social ventures in healthcare, environment and education.

South Korea’s ESG market is not big yet. Very few companies are indeed profitable while creating social value, and the number of startups that are talked about in the investment market is limited. However, interest in ESG is expected to continue as interest in environmental issues, sustainable management, and win-win is growing. Government-led impact investments are increasing with large companies and startups in the ESG sector.

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