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[StartupRecipe] The secret behind the rise of unicorn startups in Korea

#Weekly Funding Overview

[Jan. 24~ Jan.28]

The total funds raised by Korean startups of this week is KRW  221.25 billion.

JinmobilityMobility80 billionSeries AHana-Ever Best Partners Fund, Yuanta Investment
EinsisAI engine5 billionSeries AAIM Investment, Kclavis Investment, Hana Financial Investment
MayCodersK-Beuaty450 millionSeedKakao Ventures
MoondaTeacher-SeedDcamp, VNTG, Owl Ventures
PhilophosOptical Coherence Tomography1.8 billionSeries ADADAM Investment, J Curve Investment /
ScalardataElectronic car charging-SeedCNTTech
PeerMental healthcare-SeedCNTTech
CA PlanetFashion-SeedCNTTech
kiloBio/Healthcare500 millionSeedFast Ventures, Digital Healthcare Partners
MusmaConstruction solution6.5 billionSeries ABluepoint Partners, Korea Development Bank, BNK Securities, Capstone Partners
Loadcomplete15 billionSeries BKorea Investment Partners, Garena Ventures, Atinum Investment
HodoolabsEducation2 billionLG Uplus
MZQcompanyPrivate Hotel-Pre-Series AFast Ventures
SNAPTAGImage data engine2.5 billionSeries ACentral Investment Partners, TIGRIS investment, VIP Asset
Vueron TechnologyMobility10 billionPre-Series ADaesung Venture Capital, HGI, Korea Development Bank, Timefolio Asset Management, InterValue Partners
RawlabsB2B MRO-Pre-Series ATranslink Investment, The Ventures, SparkLabs, Markncompany
BasbaiBio/Healthcare-M&AAID Korea
AimtManufacture-GRANTScale TIPS
Meraki PlaceBio/Healthcare1 billionSeedBass Investment, Spring Camp, Fast ventures
Ably CorporationFashion67 billionPre-Series BShinhan Capital, LB Investment, SV Investment, Capstone Partners, Kolon Investment, intervest
ThetriveCar subscription5 billionHashed
MotionLabsWomen healthcare700 millionHyundai Marine & Fire Insurance Co, Insight Equity Partners, The Invention Lab
Uglee labWastetech-Bucket Place
리걸저스티아Legal tech1 billionKorea Credit Guarantee Fund
UpriseRobo Advisor10 billionSeries CHashed, KB Investment, Crit Ventures
DataknowsProphtech5 billionSeries ASJ Investment Partners, Kolon Investment, Wooribank, K2 Investment Partners
NetonAI Network1.2 billionHexagon Investment Consulting
Samsung SDS Home IoT-M&AZigbang
Won spritsBeverage-TA Venture
The VallaMakeupO2O1.6 billionPre-Series AInfo Bank, Goodwater Capital, intervest
Bluewhale CompanyShared place-Pre-Series AAscendo Ventures, The Invention Lab
cdfbrosCrossborder-Pre-Series ASpring Camp,Korea Credit Guarantee Fund, Fast Ventures, Ulysses Capital
Localstitchcoliving50 billionLottee Ventures, Hana Ventures
DodopointMembership serivce-M&AYanolja

Major Funding

  • i.M. Taxi operator Jinmobility has raised 80 billion won in Series A funding round. The company plans to upgrade the technology for trial self-driving service and increase the number of i.M taxis by more than 1,500.
  • Ably Corporation, a fashion e-commerce platform, has raised 67 billion won in pre-series C funding. It is set to become a unicorn with a corporate value of 900 billion won and plans to accelerate its overseas expansion.
  • Dodo Point, a point-collecting membership service operated by Spoqa, has been acquired by Yanolja.
  • Vueron Technology, a startup with 3D self-driving solution LiDAR, has secured 10 billion won in Pre-Series A funding. The funds will be used to commercialize LiDAR and establish overseas branches.

#Trend Analysis

The secret behind the rise of unicorn startups in Korea 

According to the Korea Unicorn Report published by Startup Recipe in September, there are 16 unicorns in Korea. It is the second-largest figure in Asia after China and India. This rapid increase in unicorns has been noticeable since 2019, and the government has launched national initiatives to nurture unicorns to continue this growth. It started the K Unicorn project in 2019 to select startups with the potential to become unicorns in the future and to support financial and non-financial growth. The K-Unicorn project is in two stages.

In the first stage, it provides up to 300 million won as a market development fund for baby unicorns with a corporate value of less than 100 billion won. The second stage provides special guarantees up to 10 billion won for preliminary unicorns with a corporate value of 100 billion won to 1 trillion won. Until last year, 100 baby unicorns and 76 preliminary unicorns were selected. The government lavished full support for these companies, focusing on growth potential even if they do not have sales performance. Of the 76 preliminary unicorns, 61 companies (80.3%) received an average of 53.9 billion won in guarantees alone, despite negative operating profit in the previous year at the time of surety.

These efforts by the government have led to actual results. When analyzing the performance of companies selected as baby unicorns and preliminary unicorns, many of them performed well, such as attracting follow-up investment and creating jobs. In addition, some companies showed outstanding results, such as IPOs and winning in overseas startup competitions. As of the end of 2021, the 176 companies that participated in the project created 38.3 jobs per company, a total of 6,739 jobs (68.0%↑). The company with the largest increase in employment was Kurly, which was selected as a preliminary unicorn in 2019, and achieved an increase of 2,228 people in two years.

Sales of selected companies also grew significantly. The 27 companies that received special guarantees for preliminary unicorns in 2019 saw their sales expand by about 50% for the second consecutive year. Ridi, whose operating profit was in the red at the time of selection, marked a turnaround after being selected. In addition, 76 of the 176 participating companies secured 2.24 trillion won in follow-up investment after the selection. Six companies succeeded in exit, including craft beer startup Jeju Beer and recruitment matching platform Wanted Lab. Three unicorns were born in 2022, following Kurly and Zigbang. Fashion platform ZigZag was acquired by Kakao.

Along with Ridi, several new unicorns are expected to appear in Korea this year. Ohouse operator Bucketplace, which became a unicorn with a corporate value of over 1 trillion won but didn’t formalize its status, and Pinkfong operator The Pinkfong Company are expected to join the unicorn club this year.

The government plans to expand the number of supporting companies and the amount of support in 2022 to further strengthen the project and contribute to the birth of the unicorn.

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