[StartupRecipe] Korea’s ambition to become a global venture powerhouse

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#Weekly Funding Overview

[Aug. 23~ Aug. 27]

The total funds raised by Korean startups of this week is KRW 121.25 billion.

Company	Industry	Amount	Round	Investors
TEUIDA	Education	700 million		Bigbasin Capital, SBA
Soda Crew	Gift Platform	5.7 billion	Series A	Korea Development Bank, Aju IB Investment, Korea Investment Partners, SK Securities, Bigbasin Capital
Floatic	Robot Solution	-		Kakao Ventures, Shinhan Capital, Naver D2SF
N.CER	Bio/Healthcare	2.3 billion	Series A	Coolidge Corner Investment, Enligth Ventures, Cosign, DTN Investment, Ventures Box
Cellico	Bio/Healthcare	-	GRANT	Tips
Petpeoptalk	Pettech	-		NaverD2SF, Digital Healthcare Partners
Sugopeople	waste treatment	-	Seed	Nextdream angel club
Pulse9	AI Graphic	-		Neptune
Neurobit-Science	Bio/Healthcare	4 billion		Layoonbiohealth
April Bio	Bio/Healthcare	25 billion	Series C	LB Investment, eBEST Investment & Securities, Hana Financial Investment, , KTB Network, DS Asset Management, Primier Partners, NH
Hyliumindustries		13.6 billion	Series A	Hyundai Motors, Posco, SK GAS, UNID
Lovo	AI Voice	5.3 billion	Pre-Series A	Kakao Entertainment, Kakao Investment, LG CNS, SkyDeck
Quotalab	Equity Management	-		Carta, Goodwarter Capital, Shorooq Partners, Scare asia Ventures, Draper Associates
SpaceF	Cultured meat	7 billion	Series A	Daily Partners, Daesang, Lotte Ventures, Timewise Investment, Nice Investment Partners, UTC Investment
Endo Robotics	Bio/Healthcare	4.85 billion	Series A	Knet Investment, PathfinderH, KGround Ventures
Yogi Corporation	Retail tech	2 billion		Daesung Venture Capital, Enlight Ventures
Athenas Lab	Education	3.5 billion		Korea Investment Partners, Stonebridge Ventures, D.CAMP, IBK, Korea credit guarantee fund
TXINNO Bioscience	Bio/Healthcare	7 billion	Series A	Korea Investment Partners, DSC Investment, Schmidt, Company K Partners
Seairhub	Logistics/Transportation	-	Seed	Kyungdong Invest
Neurive	Bio/Healthcare	1 billion	Pre-Series A
Buildblock	Real estate/Proptech	-	Pre-Series A	KB Investment, Shinhan Capital, Future Play, Hanla, Quantum Ventures Korea
Swiffy	Pettech	1 billion
Looko	Fashion	-	Seed	Springcamp
Smile Ventures	Luxury Fashion	21 billion	Series B	Shinhan Capital, SV Investment, Mirae asset Ventures, DS Asset Management, Must Ventures, VIP Asset Management
Plasmapp	Bio/Healthcare	17 billion	Pre-IPO
Logislab	Logistics/Transportation	-		KB Capital
Aiofoods	Food commerce	-		HKINNON

Major Funding

• Smile Ventures, an online luxury platform specializing in catch fashion, raised 21 billion won in investment. It has technology that can quickly solve payment and metasearch services that compare and search 3.5 million types of official luxury goods worldwide.
• Hylium Industries, a company specializing in liquid hydrogen, secured 13.6 billion won in investment. It is the first Korean company to develop production, storage, and transportation technologies for liquid hydrogen. The company has developed fluid hydrogen power packs for UAM(urban air mobility), drones, and crewless ships and supplies them to major domestic and foreign companies.
• Space-F, a cell-cultured meat company, finalized 7 billion won in investment. It has patents and source technologies such as separating muscle stem cells essential for producing cultured meat and developing cell-cultured and bloodless cultures. They have successfully created the cell-cultured pork prototype using pig stem cells.
• SodaCrew, the operator of SodaGift, raised 5.7 billion won in investment. SodaGift is a service where users living overseas can send gifticons and mobile products in real-time and deliver flowers and health products to people in Korea. The company plans to establish infrastructure for sending gifts from regions such as North America and Australia.

#Trend Analysis

Korea’s ambition to become a global venture powerhouse

The government announced plans to supplement various venture-related policies to become a venture powerhouse. President Moon Jae-in attended a K-venture government event saying, “the government will double the budget for startups and technology development and fully expand the priming water for venture investment.”

The Korean startup ecosystem is rapidly growing. The venture boom has become visible as it has hit an all-time high in all indicators such as the number of unicorns, the amount of startup investment, and the size of investment funds created. Meanwhile, many people in the industry are saying institutional security measures are needed for talent and resources to continue to flow into the market. In response, the government presented 12 complementary tasks, planning to lay the foundation for the leap forward as a venture powerhouse.

The government will increase the number of technology startups founded per year from 230,000 to 300,000 by 2024 and improve its policy to significantly lower the tax burden on stock options to become a practical incentive. The tax-free limit will be raised from 30 million won to 50 million won.

There will also be conditions where large-scale investments can be made without the burden of management rights, by changing the principle of one vote per share to a limited extent. Multiple voting rights, also called differential voting rights, are long-cherished in the Korean venture industry. Some analysts say that “differential voting rights” are one of the reasons Coupang went public in the U.S. stock market. Coupang founder Kim Bum-Seok holds all Class B shares, which have 29 times more voting rights than the ordinary owner Class A shares. For this reason, Kim holds 10.2 percent of total shares but has 76.7 percent of voting rights.

In addition, it will add 1 trillion won in global venture funds and create a 1 trillion won initial startup fund. To ensure stable growth of venture companies, the government will prepare a revised plan including the abolition of the special venture law by the end of this year. The maximum limit of technology guarantees will also be raised from 10 billion won to 20 billion won. Investors will also be allowed to recover their investments not just through IPOs, but through mergers and acquisitions and sales of old shares.

For the competitiveness of ESG (environmental, social, and governance) in the venture industry, the government will consider establishing a new climate response guarantee based on carbon value evaluation and the push for the creation of ESG venture funds by piloting an ESG screening system on its parent fund.

Korea is going through a new era where the country had the first generation of entrepreneurship that bred the global conglomerates such as Samsung and Hyundai, and now ventures and startups are leading economic revitalization. Startups are creating jobs and becoming a new growth engine for the country, and efforts from the government and various stakehoders are continuing to maintain them. The government plans to help K-ventures grow into new global conglomerates through this security measure by attracting talent and funds to the venture ecosystem.