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[StartupRecipe] The most notable Korean startup M&A deals of 2021

#Weekly Funding Overview

[Dec. 3~ Dec.7]

The total funds raised by Korean startups of this week is KRW 281.5 billion.

HideaGame20 billionNeowiz
AIMMOAI12.6 billionSeries AAIMMO DS Asset Management, Industrial bank of Korea, Hanwha Investment & Securities, S&S Investment, Toseu Investment, Korea Asset Investment & Securities, Venturefield
NulleesoftTax Platform4 billionSeries AD3 Jubilee Partners, Smilegate Investment, Mirae Asset Venture Investment, KTB Network
TIME&COMedia/Content1.1 billionSeedKakao Ventures
We are theFashion900 millionPre-Series AKorea Investment
Reverse LabShared bus-SeedCNTTech
PlanfitFitness-SeedSpring Camp
AicelData Service-Fiscal note
DosigotganFood-Pre-Series ASopoong Ventures, Kingsley Ventures, Korea Credit Guarantee Fund, Samyangchemical
TalentBankTalent Matching6 billionSeries AAvenue company, BNK Securities, Hanwhalife
ATOMOM KoreaHealthcare-New Paradigm Investment
Maas AsiaShared mobility-Series ALotte Ventures, Daedeok Venture Partners, Main Street Investment
Kristin CompanyFashion-GRANTTIPS
VIRNECTXR30 billionSeries BStic Ventures, Lotte Ventures, Hanwha, KTB Network, KB Investment, Korea Develpoment Bank
Dverdigital mail room2 billionSeries ASJ Investment Partners, Capstone Partners, LG Uplus
DealiciousFood54 billionSeries CStonebridge Ventures, Stonebridge Ventures, DSC Investment, Yuanta Investment, Smilegate Investment
BemyfriendsFan commerce8 billionSaehan Venture Capital, GS, Dreamuscomapny
2HAELIFESTYLEfurniture rental3 billionSeries ASmartstudyVentures, SUN&L, Hyundai Marine & Fire Insurance Co, Bluepointpartners, Seoul Business Agency
CurocellBio/Healthcare36 billionPre-IPO
Selversonmichannel Platform-SeedCNTTech
Egg CorporationDigital Healthcare-SeedCCEI gangwon
Lighten Technologiesh-SeedCCEI gangwon
Lighten TechnologiesHealthcare-SeedCCEI gangwon
NBNBhousing rental-SeedCCEI Incheon
Line systemLogistics-M&AFresheasy
Standard EnergyVanadium Ion Battery65 billionLotte Chemical
FunbleFintech5 billionWoori Technology Investment, SK Securities, Maple Investment Partners, Hanwha Hotels & Resorts, The Square& Company
FridayslabBusiness tool-SeedKakao Ventures
OmniartArt commerce-SeedHITEJINRO
UnitcompanyAll in one production-SeedStrong Ventures
ecgMobility-CNTTech, Hankooktire
SmartInside AISafety solution-Honest Ventures
NinenjoyGame-Pre-Series Apocket company
SAFESPECkids community-SeedIdeapartners
NBNBhousing rental-SeedKOVA
SpringCloudMobility18 billionSeries AInfoBank Corp, Mando, Korea Develpoment Bank, Woodreambio, Korea Credit Guarantee Fund
IconchinaMarketing10.4 billionAngels
GPEXBlockchain1.8 billionSima Capital
Cinnamon companyKids Content100 millionSeedStartupx
HIPPO T&CDigital therapeutics300 millionPre-Series AJ Curve Investment, StarQuest Asset Management, Insunginfo

Major Funding

  • Standard Energy, a vanadium-ion battery developer, raised 65 billion won from Lotte Chemical. With lower ignition hazards and higher durability than lithium-ion batteries, vanadium-ion batteries are regarded as the next-generation batteries in the ESS market. Lotte Chemical became Standard Energy’s second-largest stakeholder as a result of this investment. They hope to achieve synergy through collaboration.
  • Dealicious, which operates the fashion retail and wholesale trading platform ShinSang Market, raised 54 billion won. It launched the service in 2013, and as of December, the total value of transactions had surpassed 2 trillion won. It will work in full swing for global expansion based on the successful experience of the digital transformation of K-fashion.
  • XR developer Virnect secured a 30 billion won investment. It will use the funds to establish an industrial XR ecosystem and to promote itself to advance into global markets. As a leading company in the metaverse market, it is set to go public this year.

#Trend Analysis

The most notable Korean startup M&A deals of 2021

2021 was the most active year ever for the startup M&A market. It was a year of opportunity for startups and investment companies, with startups acquiring startups, startups acquiring middle-market enterprises, and startups being acquired by global companies. 

The largest acquisition of this year was the takeover of Hyperconnect by Tinder operator Match Group at $1.72 billion(1.93 trillion won). Following Baedal Minjok, it was another case demonstrating that Korean technology startups can be sold to global companies.

Large companies are actively utilizing startups to expand their business areas and strengthen their competitiveness. To preoccupy the online and offline distribution market, GS Retail purchased Delivery Hero, a delivery app Yogiyo operator, along with private equity funds. Lotte hopes to make a breakthrough in its lagging e-commerce business by acquiring Junggonara.

Kakao bought Tapas Media and Radish, two web novel and webtoon platforms with a global presence, to speed up its entry into the global market. Kakao also bought Croquis, a Zigzag operator, and Grip Company, a live commerce platform to expand its e-commerce business area.

In 2021, the number of acquisitions between startups increased significantly, with unicorns absorbing other startups in particular. Musinsa enhanced its competitiveness in the women’s fashion sector by acquiring StyleShare and 29CM for KRW 300 billion. Startups also took over industry leaders, with Yanolja acquiring a first-generation venture company Interpart for 290 billion won. Yanolja is also accelerating its growth ahead of its IPO by acquiring Sanha IT and Dable. Moreover, Toss operator Viva Republica absorbed VCNC, which was in charge of operating Socar’s Tada division, signaling the birth of a new model that combines finance and mobility. 

In addition, meal kit company Fresheasy acquired related companies, including Heodak and Dr. Kitchen, which helps health care like diabetes management. Bunjang also aims to become a unicorn through business expansion by acquiring two used clothes companies.

The reason for the increase in M&A cases is that, in order to respond to rapidly changing market trends, companies adopt a strategy of absorbing external companies that stand out in the market instead of directly conducting new businesses. It wouldn’t have been possible without the abundant financial resources. In the past, most M&A cases took place between companies in the same industry, but now more and more companies are seeking synergy by acquiring companies in other fields. Amid this trend, VCs predict that the number of cases between startups or startups acquiring existing companies will continue to rise in 2022.

Major M&A Deals in 2021

Company NameCompany DescriptionAcquisition CostAcquiring Company
HyperconnectVideo Messenger1.93 trillion wonMatch Group
Delivery HeroDelivery Platform800 billion wonGS Retail, Affinity Equity Partners, Permira
Tapas MediaWebtoon&Web Novel Platform600 billion wonKakao Entertainment 
RadishWeb Novel Platform500 billion wonKakao Entertainment 
StyleShareFashion Platform300 billion wonMusinsa
InterparkE-commerce294 billion wonYanolja
JunggonaraSecondhand Marketplace115 billion wonLotte, Eugene Asset Management, NH Securities-Opus Private Equity
CroquisFashion PlatformNon-disclosureKakao
MunpiaWeb Novel PlatformNon-disclosureNaver Webtoon, Premier Partners
Millie’s LibraryAudiobookNon-disclosureGenie Music
VCNCSocar’s Tada divisionNon-disclosureViva Republica
Dr. KitchenHealthcare PlatformNon-disclosureFresheasy

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