[StartupRecipe]Korean Startups Pivot and Expand as Survival Pressures Mount

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Korean Startups Pivot and Expand as Survival Pressures Mount

Lendit, one of Korea’s first-generation P2P fintech companies, recently announced it will shut down its online investment-linked lending business. After failing to secure a license for the fourth internet-only bank, the company is closing its core operations and pivoting to an entirely new service. This decision symbolically reflects the harsh reality facing the startup ecosystem today.

The Korean startup industry is undergoing rapid transformation as companies fight for survival. While the investment climate has improved somewhat in the second half of the year thanks to expanded government support for AI startups, the market remains challenging. After years of severe funding winter, more companies are closing or being acquired. Yet a growing number are finding new paths forward through business model changes and expansion into new sectors.

Even unicorn-level startups face these pressures. Real estate platform Zigbang struggled after failing to adapt to changing property market conditions but made a bold pivot by acquiring Samsung SDS’s IoT division. The company is now transforming into a smart home brand centered on smart door locks, evolving beyond a simple app service into a comprehensive proptech company covering all aspects of residential living. Market Kurly, which pioneered dawn delivery for fresh groceries, hit growth obstacles due to failed fundraising attempts. The company launched Beauty Kurly, expanding into the beauty sector to secure new revenue streams and growth momentum. Some startups succeeded by completely transforming their business models.

Ridi began as an e-book service but shifted its focus to webtoons and web novels, emerging as a content industry powerhouse and achieving unicorn status with a valuation exceeding KRW 1 trillion. Spoon started as a battery-sharing service but reinvented itself as audio platform Spoon Radio, establishing a foothold in global markets. Now the company is attempting another transformation with Beglue, a short-form drama platform. Survival-driven changes are underway across multiple sectors.

White Cube, operator of habit-forming app Challengers, pivoted to a beauty app. Luxury platform Trenbe shifted to secondhand luxury commerce and achieved profitability for two consecutive quarters. In the B2B space, Business Canvas switched from collaboration tool Typed to CRM service Retouch. Proptech firm Ziptos restructured from a direct operation model to a franchise business. Logistics startup Flotiq expanded beyond picking robot manufacturing to Flora, a platform supporting robot adoption and operation, focusing on tangible performance. Even early-stage startup Papis, a luxury repair platform, is seeking new opportunities by entering the growing secondhand luxury market. Business expansion and pivoting do not solve everything.

Watcha, a leading Korean OTT platform, diversified into webtoons and short-form dramas but could not overcome its deteriorating finances and ultimately entered corporate rehabilitation proceedings. With prolonged uncertainty at home and abroad and numerous startup closures expected this year, next year’s outlook remains dim. In this environment, companies will likely continue seeking breakthroughs through business model innovation, global expansion and new venture development.

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