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

#Weekly Funding Overview

[Aug. 23~ Aug. 27]

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

TEUIDAEducation700 millionBigbasin Capital, SBA
Soda CrewGift Platform5.7 billionSeries AKorea Development Bank, Aju IB Investment, Korea Investment Partners, SK Securities, Bigbasin Capital
FloaticRobot Solution-Kakao Ventures, Shinhan Capital, Naver D2SF
N.CERBio/Healthcare2.3 billionSeries ACoolidge Corner Investment, Enligth Ventures, Cosign, DTN Investment, Ventures Box
PetpeoptalkPettech-NaverD2SF, Digital Healthcare Partners
Sugopeoplewaste treatment-SeedNextdream angel club
Pulse9AI Graphic-Neptune
Neurobit-ScienceBio/Healthcare4 billionLayoonbiohealth
April BioBio/Healthcare25 billionSeries CLB Investment, eBEST Investment & Securities, Hana Financial Investment, , KTB Network, DS Asset Management, Primier Partners, NH
Hyliumindustries13.6 billionSeries AHyundai Motors, Posco, SK GAS, UNID
LovoAI Voice5.3 billionPre-Series AKakao Entertainment, Kakao Investment, LG CNS, SkyDeck
QuotalabEquity Management-Carta, Goodwarter Capital, Shorooq Partners, Scare asia Ventures, Draper Associates
SpaceFCultured meat7 billionSeries ADaily Partners, Daesang, Lotte Ventures, Timewise Investment, Nice Investment Partners, UTC Investment
Endo RoboticsBio/Healthcare4.85 billionSeries AKnet Investment, PathfinderH, KGround Ventures
Yogi CorporationRetail tech2 billionDaesung Venture Capital, Enlight Ventures
Athenas LabEducation3.5 billionKorea Investment Partners, Stonebridge Ventures, D.CAMP, IBK, Korea credit guarantee fund
TXINNO BioscienceBio/Healthcare7 billionSeries AKorea Investment Partners, DSC Investment, Schmidt, Company K Partners
SeairhubLogistics/Transportation-SeedKyungdong Invest
NeuriveBio/Healthcare1 billionPre-Series A
BuildblockReal estate/Proptech-Pre-Series AKB Investment, Shinhan Capital, Future Play, Hanla, Quantum Ventures Korea
SwiffyPettech1 billion
Smile VenturesLuxury Fashion21 billionSeries BShinhan Capital, SV Investment, Mirae asset Ventures, DS Asset Management, Must Ventures, VIP Asset Management
PlasmappBio/Healthcare17 billionPre-IPO
LogislabLogistics/Transportation-KB Capital
AiofoodsFood 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.

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