[StartupRecipe] The Rise of U.S.-Based Korean Startups

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The Rise of U.S.-Based Korean Startups

Korean startups launching directly in global markets are rapidly increasing. Moving away from the traditional approach of growing business domestically before exploring overseas expansion, the strategy of establishing headquarters abroad from the start to target local markets is becoming commonplace. In line with this trend, the government has amended the Small and Medium Business Venture Support Act to establish a legal basis for the Korea Fund of Funds to invest in overseas startups, and domestic venture capital firms are also expanding their investments in Korean startups abroad.

According to Startup Recipe, of the 26 Korean startups that received domestic investment or government funding this year, 24 have their headquarters in the United States. The majority are located in Silicon Valley areas such as San Francisco and Palo Alto, followed by New York, while outside the U.S., they are based in Vietnam and Japan.

By sector, AI and biotech showed strength, along with manufacturing fields like robotics and defense. By stage, early-stage companies accounted for more than 50%, the largest share. Through establishing overseas bases, companies can secure large-scale funding of over 10 billion won even in early stages, and can secure even larger funds as they progress to growth stages. Another advantage is the ability to expand markets through investments from global companies. For seed investment, most received funding from local early-stage investors, and as companies progress to growth stages, we can see that global corporations like Amazon and Aramco, national funds, and domestic conglomerates including SK Networks, LG, and Kakao’s CVCs are participating in investments. Among domestic venture capital firms, SV Investment, Base Ventures, and Smilegate Investment were found to have participated in multiple deals.

As global expansion becomes a necessity rather than a choice, startup support organizations are also expanding their U.S. bases and supporting Korean startups. The Ministry of SMEs and Startups plans to open a Startup Venture Campus (SVC) in Menlo Park, and the Asan Nanum Foundation has opened Maru SF, a space where startups can stay. Domestic venture capital firms are also establishing branches in Silicon Valley one after another and expanding investments. This atmosphere promoting global market entry is expected to further strengthen the born global strategies of early-stage startups, and the number of startups going abroad to overcome the limitations of domestic investment scale is projected to gradually increase.