[StartupRecipe] What Korean Startups Are Asking from the New President

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#Weekly Funding Overview

[May. 5~ May. 9]

#FUNDING

Company	Inudustry	Amount	Round	Investors
Mediark	Medical IT	-	Pre Series A	JB Investment
Carpenstreet	Digital creative asset platform	-	Series A2	TS Investment, Z Venture Capital
Qtech	Optical Components for TV	4 billion	Series A	Lode Investment, Kiwoom Asset Management, JB Woori Capital, Eco Capital, Tyche Investment
Zigbang	Proptech	60 billion		VIG Alternative Credit
Gloud	DX for Dental care	8.5 billion	Series A	SBI Investment, Quantum Ventures Korea, Korea Investment Partners, Ulsan TIPS Venture Association, Sema Investment, Next Unicorn Investment Association
Petpharm	Pet Healthcare	6.5 billion	Series B	Stick Ventures, Crit Ventures, Timeworks Investments, DCamp
Orandbio	Biomaterials	-		Genaxis
Scon	Virtual IP	1 billion		KCC
Curestream	Autonomous artificial pancreas system	11 billion	Series A	We Ventures, KODIT, Woori Venture Partners, Smilegate Investment, Innopolis Partners, Devsisters Ventures, Vivid Investment
V-IC	Venture debt Platform	7 billion		Bass Ventures
Pluglink	EV charging platform	4.5 billion		JKL Partners
Zigtruck	Used cargo truck trading platform	1.2 billion	Pre Series A	JB Investment, Angel Investors
Markchain	Premium Car wash	-		ENSL Partners

#TREND ANALYSIS

What Korean Startups Are Asking from the New President

The Korean startup ecosystem is facing a period of decreased vitality, marked by a lack of significant investments, difficulties in IPO and M&A markets, and a notable decline in investment during April. In response to these challenges, prominent startup organizations, including the Korea Venture Business Association, Korea Startup Forum, and Startup Alliance, are proactively seeking solutions. Ahead of the 21st presidential election, these organizations have announced policy proposals aimed at fostering innovation and growth within the ecosystem.

These organizations share a consensus that startups are crucial for transforming South Korea’s economic structure and securing future competitiveness. They emphasize the necessity of maximizing the potential of these young companies through robust policy support. A particular focus is placed on the role of startups in emerging industries such as artificial intelligence (AI). The organizations underscore the need for comprehensive institutional improvements, including the creation of favorable investment environments, the removal of unnecessary regulations, and the establishment of flexible working hour systems.

Fostering Future-Oriented Industries

First, these major organizations emphasize that Korea’s economy needs to shift from manufacturing-centered to future-oriented new industries. They argue that fostering advanced industrial sectors such as AI, digital healthcare, climate tech, future mobility, and aerospace would strengthen the country’s overall competitiveness. They particularly urge promotion policies to help startups grow as a core pillar of the AI industry, actively utilizing data assets and ICT infrastructure to secure leadership in the AI industry ecosystem, and developing policies to enhance the global competitiveness of the platform industry.

Breaking Down Regulatory Barriers

Regulatory hurdles are identified as a significant impediment to the activation of the startup ecosystem. The organizations are calling for substantial regulatory innovation through measures such as reviewing regulations affecting the platform industry, improving network usage fee systems, introducing a Regulatory Sandbox 2.0, and implementing a fast-track system for regulations that can be resolved within 100 days. They also highlight that South Korea’s regulatory environment is more restrictive compared to other advanced nations and suggest adopting regulatory innovation standards to align it with countries like the United States, Germany, and Australia.

Easing Labor Rules

In an increasingly competitive global landscape, attracting and retaining top talent is directly linked to a company’s survival. However, South Korea’s rigid labor environment is seen as an obstacle to securing startup competitiveness. Proposed solutions include introducing more flexibility into the 52-hour workweek by expanding overtime calculation units from weekly to monthly, quarterly, semi-annual, or annual. The policy proposals also encompass providing tax incentives and improving stock option systems to encourage youth entrepreneurship and attract high-caliber talent in AI and software fields.

Boosting Investment for Growth

Establishing a vibrant investment ecosystem is deemed essential for the sustained growth of startups and the emergence of innovative companies. Currently, South Korea’s venture investment ratio relative to its GDP lags significantly behind that of the United States or Israel, underscoring the urgent need for improvements in investment infrastructure. To address this, legislation is being promoted to mandate that a minimum of 5% of the 68 statutory funds be allocated to ventures and startups. This measure is projected to substantially increase venture investment from the current approximately 11 trillion won to 51 trillion won upon implementation. Other proposed policies include expanding tax credits for venture fund contributions, doubling income tax deduction rates for individual investors, establishing mechanisms to facilitate M&As, and building investment and recovery ecosystems through the creation of secondary funds.

#MORE NEWS

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