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[StartupRecipe] Korean social ventures are on the rise

#Weekly Funding Overview

[Feb.14 ~ Feb.18]

The total funds raised by Korean startups of this week is KRW 425.4 billion.

    Major Funding

    • SemiFive, a semiconductor design platform, has raised 130 billion won. Its design platform is regarded to cut semiconductor development costs and schedule by less than half. Korean AI semiconductor startups such as Furiosa AI and Rebellions are based on the SemiFive platform.
    • Megazone Cloud has secured 130 billion won from KT. The company will strengthen its partnership with KT and cooperate in cloud infrastructure services, cloud platforms, and solution services.
    • Team Sparta, which provides coding and SW education services, has raised 13 billion won. The company plans to hire talent and build a community platform with the investment.
    • 3D design source open platform ACON3D operator Carpen Street secured 10 billion won in funds. Its service lets you easily search and download the sources you need for making content. The team is preparing to launch an official service for users worldwide.

    #Trend Analysis

    Korean social ventures are on the rise… Impact fund increased by 9 times

    As of August 2021, there were 2,031 social ventures in Korea. According to data released by the government on the status of social ventures and social value measurement, the number of social ventures in Korea increased by 35% compared to 2020. The social value created by 30 social ventures was 20.2 billion won.

    Social venture companies received 267.1 billion won in impact investment in 2020, which is more than nine times higher than 28.2 billion won in 2019. 

    According to data from Startup Recipe, social venture companies, including ESG companies, raised 33.9 billion won in 2020, but the amount rose sharply to 210 billion won in 2021. The average sales of social ventures are 2.8 billion won, and the average assets are 2.7 billion won.

    This achievement is attributed to the government’s efforts to build infrastructure to support social ventures for four years from 2018 to 2021. The government supported 3,444 social ventures (including duplicates) through startup support, growth support, and financial support programs. It has also reorganized systems and infrastructure to revitalize the social venture ecosystem, including establishing a legal basis for social venture and founding a social value measurement center.

    In addition, since 2020, the government has been preparing measures to assess the social value ​​created by social ventures based on the IMP(Impact Management Project), international standards for impact measurement and reporting, so that social ventures ​​can be properly evaluated. In 2021, the government measured the social value of 30 companies in 7 fields, and it was confirmed that they generated a total of 20.2 billion won in social value last year. An edtech company Enuma is one of Korea’s most representative social ventures. Enuma has created a value of 1 billion won by improving the accessibility of learning the Korean language for multicultural and low-income families in Korea. It is a social venture that jointly won the 2019 Global Learning XPRIZE sponsored by Elon Musk and provides Todo Math that combines games and education.

    Social ventures are also having an impact on the employment of women and the underprivileged. Of the 2,031 companies surveyed, 1,293 companies employed a total of 29,465 people. The proportion of young workers under 30 and female workers were 44.9% and 45.3%, respectively, of the total workforce, which showed the social values’ contribution to youth and female employment.

    Unlike in the past, technology-based social ventures are also on the rise. 79% of social ventures belonged to the manufacturing and ICT sectors, and more than half of them owned innovation certificates.

    The government plans to open a social value measurement platform this year and provide support programs such as impact investment, guarantee, and consulting for measurement companies to spread social value measurement to the ecosystem.

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