[StartupRecipe] Korean Startup Investment Declined in Q1

Access to the latest Korean startup news and startup database for free

#Weekly Funding Overview

[April.25 ~ April. 30]

The total funds raised by Korean startups of this week is KRW 337.6 billion.

Company	Industry	Amount	Round	Investors
Liahnson&Company	Experts network	-	M&A	Drama&Company
10wonders	Influencer commerce	-	Pre-Series A	Seyoung Company
Tailer town	3050 men's Fashion	-	Seed	Findus
Pixelic	CMS Software	1.9 billion	Pre-Seed	Bass Investment., Npartners, Translink Investment
Rokya	Agriculture	10 billion		Kurly
Jaranda	Kids care	31 billion	Series B	Korea Investment Partners, Atinum Investment, Kakao Ventures, CompanyKPartners
Metafines	Bio/Healthcare	20 billion	Series B	DSC Investment, BMI Korea, Korea Investment & Securities, Prodigy Investment, Meritz Securities, Meritz Capital, Industrial Bank of Korea, IP Ventures·Middle East Finance, SNS-Investment
ASWEMAKE	Micro fullfillment	-	Pre-Series A	New Paradigm Investment
Witch company	NFT Metaverse	-		Bifrost
Perfit	AI tech	4 billion	Series A	Snow, ATU Partners, Capstone Partners
Homes Company	Prophtech	12.5 billion	Series B	Woomi Construction, Shinhan Capital, DA Value Investment, Gunyoung, Big Basin Capital
Goodchoice	Hospitality	50 billion		Mirae Asset Capital
Featuring	Influencer platform	-	Pre-Series A	Magna Investment, CNT Tech
Texture	Social Reading	-	Seed	Smartstudy Ventures
Ihateflyingbugs	Education	30 billion	Series C	Deep dive partners, Murim Capital, Korea Growth Finance, Shinhan Financial, Hana Financial, Kyobo Group, IBK Capital
Nearthab	Drone	20 billion	Series C	IMM Investment, NH Investment & Securities
Outstanding	Media/Content	-	M&A	E BROADCASTING
Rebuilder AI	3D Modelling	-		Naver D2SF, KB Investment
Endand	B2B Secondhand	-	Seed	The Ventures
Friendtrip	Activity Platform	8 billion	Series B bridge	Kyobo Securities CVC, Magna-Axis Investment, Nice Investment Partners, SJ Investment Partners, K-Bridge Investment
Neubility	Robotics	23 billion	Series A	IMM Investment, Shinsegae Signite Partners, Lotte Ventures, Samsung Wellstory, DS & Partners, KB Investment, Portitodot, SKT-Infinite Fund, Capstone Partners, Future Play, Shinhan Capital
Firstclass Company	Dating Platform	-	Seed	Angels
261house	Shared Cloth	-	Seed	PNU Tech. Holdings, Chonnam National University holdings, Gwangju United Technology Holdings
CrossAngle	Crypto asset research	1.7 billion	Series B	KB Investment, Shinhan Capital, Premier Partners, IMM Investment
Klim Ventures	Accelerator	5.5 billion	NEXON KOREA	Klim Ventures
SIRS	Men's medical platform	-	Pre-Series A	D Ventures, J-Curve Investment, Mashup Angels, Pearl Abyss Capita
Music cow	Fintech	100 billion		Stick Investment PEF
IDESIGN LAB	Education	-	Pre-Series A	Newborn Ventures, Angles
Bubblecloud	Pettech	-	Seed	JB Ventures
AIOFARM	Agriculture	-	Seed	JB Ventures
WeAreFriends	Travel	-	Seed	CNT Tech
Boosters Company	Healthcare	-	M&A	DrNow
Bitglim	Streaming Platform	-	GRANT	TIPS
Talentree	HR	-	Seed	Kakao Ventures, Hashed, Nextrans
Kodebox	Equity Management	20 billion	Series B	Dunamu, IBX Partners, TBT, We Ventures, Daekyo Investment, ES Investor, KB Investment, HB Investment

Major Funding

• Music Cow, a fractional investing platform for music copyright, has secured KRW 100 billion from PEF. The funds will be used to hire experts and reorganize businesses following the incorporation of institutional rights such as the Capital Markets Act.
• Hotel-booking service GoodChoice (Yeogi Eottae) has received KRW 50 billion in funding, making it a new unicorn. The company was valued at KRW 1.2 trillion. The company’s sales have increased by 53 percent annually over the last five years, and its operating profit was KRW 15.5 billion last year, resulting in a trade surplus for the third year in a row. It launched a car rental and space rental service and set a plan to start an overseas travel service.
• Childcare service Jaranda has received KRW 31 billion in investment, bringing the total amount raised to KRW 44.8 billion. Sales have tripled compared to previous year, surpassing KRW 10 billion in total. By 2022, the team will have completed its nationwide service expansion. It aims to be a one-stop app for kids, with both commerce and content. 

#Trend Analysis

Korean Startup Investment Declined in Q1

Global startup investment has begun to slow down. Changes have been detected in the investment ecosystem, which has continued to thrive despite the COVID-19 pandemic. According to PitchBook Data, US venture investment in the first quarter was $70.7 billion, down from $95.4 billion in the previous quarter and down from $77 billion in the same period a year ago. Data from CB Insights also showed that global VC funding declined by 19 percent in the first quarter of this year compared to the previous quarter.

What impact will the global situation have on the Korean venture market? According to the Startup Recipe, the total investment performance of Korean startups in the first quarter was more than KRW 3.49 trillion, the highest ever. The inflow of capital was more than double that of the same period last year. Furthermore, the Ministry of SMEs and Startups recently reported that for the first time in history, investment raised in the first quarter exceeded KRW 2 trillion. The investment fever seems to continue. 

However, since January, the amount of funds and the number of investments made each month in Korea have been declining. The monthly investment, which stayed above KRW 1 trillion in January and February, fell below KRW 1 trillion in March.

While seed investment and transactions exceeding KRW 100 billion increased, the number of companies raising KRW 10 billion or more decreased. In particular, those which attracted between KRW 40 and 100 billion dropped significantly. As companies that have raised more than KRW 100 billion account for more than 50% of total investment, the concentration on early-stage and late-stage companies is becoming more pronounced. In addition, based on the Startup Recipe’s investment data, it appears that a high growth curve in April is unlikely. 

Since last year’s fund was the largest ever, those funds will flow into the startups at any time. However, due to domestic and international threats, domestic investors are more likely to slow down their investments and not value the company as highly as last year. Domestic venture capital firms also advise in their investment outlook that we should not expect the same for this year when evaluating the value of startup companies.

They also warn startups about the cash burn. That is, startups should have enough cash to prepare for a crisis, the same as two years ago when the pandemic began. In addition, it is recommended that founders complete the financing as soon as possible. Although the investment performance and fund formation were both positive in the first quarter, the government advises one should have a long-term perspective as interest rate hikes can lead to a conservative investment or hinder fund formation.

We cannot make a clear decision on whether this will be temporary or long-term. Still, considering data and market conditions, it is necessary to establish an investment strategy, as this might lead to conservative investments.