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[StartupRecipe] Why great talent rush to startups from conglomerates

#Weekly Funding Overview

[Aug. 16~ Aug. 20]

The total funds raised by Korean startups of this week is KRW 377.8 billion.

MarqvisionAI Software2.4 billionSoftbank Ventures
DotdotdotMetaverse2.7 billionPre-Series AKorea investment Partners, KB Investment, Laguna Investment
InpockInfluencer platform-SeedSpring Camp
JejememeKids platform-SeedSpring Camp
HyperithmBlockchain13 billionSeries BWemade Tress, Hashed, Coinbase Ventures, Cocone, Guardian Fund, GS Futures
MolocoAd tech173.4 billionSeries CTiger Global Management
Thumb TechnologiesAI Software1.6 billionPre seedKakao Ventures, Futures Play, KDB Capital
ibackWelldying platform-Seed500startups, Digital Health Partners
Daangn MarketSecondhand178.9 billionSeries DDST Global, Aspex Management, Goodwarter capital, Softbank Ventures, Altos Ventures, Kakao Ventures, Reverent Partners
LaplaceData Analysis-SeedMashup Angels
FITTHealthcare-Naver D2SF
FnbpeopleFranchise management500 millionKakao Ventures, Shinhan Capital
Cooljamm companyVideo editting2 billionPre-Series ATBT

Major Funding

  • Danggeun Market raised an investment worth KRW 178.9 billion. The company was valued at 3 trillion won and became a unicorn. Starting as a used trading platform, it grew into a hyperlocal service that connects local small businesses and residents. It is speeding up its service diversification in collaboration with local O2O platforms such as cleaning and education. The new investment will be used for technological advancement, overseas expansion, and marketing.
  • Hyperithm, a cryptocurrency investment manager, raised a 13 billion won investment. It is the first case in which Coinbase, the largest cryptocurrency exchange in the United States, invested in a Korean blockchain company. The company operates a virtual currency investment trust and brokerage business for institutional and qualified investors. 50 institutions are their clients.
  • Next-generation metaverse platform DotDotDot secured 2.7 billion won. Founded by a game industry veteran, the company is developing a metaverse social media platform where users can make stories and give emotions to 3D characters and backgrounds in a short-form video.
  • CoolJamm Company raised a 2 billion won investment through its video editor matching platform Editmate. Their operations not just match but manage the project so that customers can get what they want. They plan to develop a new system to manage video editor history.

#Trend Analysis

Why great talent rush to startups from conglomerates

Startups are playing a significant role in creating jobs in the frozen Korean job market. According to the data released by the government, 35,482 venture companies employed a total of 727,498 people as of the end of June, which is a 10.2% increase from the same period last year.

Startup and venture companies are hiring more people than large companies. As of the end of last year, they employed 2,000 more people than the four major Korean conglomerates such as Samsung and LG. In particular, the increase in employment of South Korean unicorn companies is noticeable. Eight South Korean unicorn companies increased hiring by an average of 265 people per company, 139 times higher than the average of 1.9 per company by all venture companies. Kurly, which operates the e-commerce platform Market Kurly, hired 1,058 people and ranked first among the eight companies, followed by the game company Krafton, Yanolja, Musinsa, and Jikbang.

Companies that raised investment in the first half of this year increased their employment by nearly 10,000 compared to the end of June last year.

In addition, 4 out of 10 new hires were youths and women. Youth employment increased by 25,000 in the first half of this year. By industry, ICT (+1,329 people), distribution/service (+1,201 people), and bio/medical industry (+640 people) hired the most. These three industries are the ones with the most venture investments in the first half of this year, and employment has increased along with investment.

While startups are increasing their hiring, more and more people are moving from large companies or foreign investment banks (IBs) to startups. It is because startups offer higher starting salaries, stock options, and even signing bonuses in order to secure excellent talent.

As the investment market is revitalized, technology startups that have secured a lot of funds are using the investment to absorb talent. The ‘war for manpower’ has spread throughout the IT industry in the first half of this year. Companies have battled to take developers away, using high salaries as weapons. Talents who have endured the intense work environment and conservative organizational culture in large corporations are moving to startups that meet their requirements, including a liberal corporate culture, an equal decision-making structure, a sense of accomplishment from rapid growth, and high salaries. 

This phenomenon is one of the results of the rapid growth of the startup ecosystem. It is evaluated positively in the sense that the Korean business environment, which was centered on large companies in the past, has changed more dynamically.

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