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[StartupRecipe] Investor Interest in Fashion Startups Remains High

#Weekly Funding Overview

[Mar. 20 ~ Mar. 24]

The total funds raised by Korean startups of this week is KRW 125.3 billion.

Tresure labsNFT Metaverse-Solana
RideMobility-Pre-Series A
SIGEnergy3.5 billionPre-IPOPyco & company, MW & Company
Denve300 millionSeedImpactSquare
TripusTravel-SeedKorea Investment Accelerator
Ably CorporationFashion50 billionSeries CPine Tree Investment & Management
MedithingsHealthcare-Seed BridgeKakao Ventures, Dcamp
Urban Labsaltprotein-SeedBigbang Angels, Korea Omega Investment
PeLeMedBio5.5 billionSeries A bridgeLSK Investment, KDB Capital, Bokwang Investment, BSK Investment, Alpha One Investment
Crocus6.4 billionSeries BE&Investment, Pioneer Investment, Shinhan Asset Management, S&S Investment
RentreIT Rental-GrantTIPS
Aroundfollieoutdoor stay-M&AStayfolio
KreamResell50.6 billionSeries CSamsung Securities, Mirae Asset Capital, Altos Ventures, ExomAsia
NeubilityRobotics3 billionSamsung Venture Investment
FitpetPettech5 billionDongwha
DogatherReal estate1 billionSeedSeoul Techno Holdings, KAIST Venture Investment
EarlyslothAI CRM Platform-Pre-Series AHana Financial Investment, K&Investment Partners
DeepsalesTrade Platform-SeedYoonmin Foundation, Blue Point Partners, Kingsley Ventures
GreenlabsAgriculture50 billionBRV Capital Manager, Sky Lake

Major Funding

  • Kream, a resell platform, has secured an additional KRW 50.6 billion to complete its Series C funding of KRW 206 billion, reaching a unicorn valuation of KRW 970-980 billion. The company is focusing on building a commerce ecosystem across major Asian regions including Japan, Singapore, Thailand, and Indonesia through its M&A strategy. The investment will be utilized to expedite the company’s global expansion plans.
  • Ably Corp. has secured KRW 50 billion in venture debt, bringing its cumulative investment to KRW 223 billion, which is the highest in the women’s shopping industry within the Korean startup ecosystem. The company has become one of the top 1 fashion platforms, with monthly transactions of over KRW 100 billion and annual transactions of KRW 1 trillion, within just four years of its launch. Ably Corp. is on the verge of breaking even and aims to achieve unicorn status within the year.
  • FitPet, a startup specializing in pet healthcare solutions, has secured a strategic investment of KRW 5 billion from Donghwa Pharmaceutical. The investment will be used to further develop FitPet’s innovative pet healthcare database, which Donghwa Pharmaceutical plans to utilize for animal medicine research and development. The partnership between the two companies is expected to be highly cooperative, with a shared goal of advancing the health and wellbeing of pets.

#Trend Analysis

Investor Interest in Fashion Startups Remains High

The startup landscape in 2023 is expected to be more challenging due to the uncertain domestic and global financial markets. According to the monthly investment report from Startuprecipe, funding in January plummeted by 80% compared to the same period last year. In February, total investment fell short of KRW 200 billion and March is expected to follow a similar trend with total investment remaining in the low KRW 200 billion range. However, the fashion and beauty sectors are still attracting large-scale investment. Specifically, platforms that distribute luxury goods and limited-edition products in the fashion and beauty industries have garnered particular attention.

Several related companies have announced significant investments in recent times. For instance, resell platform Cream secured KRW227 billion in a Series C funding round with an additional KRW50.6 billion. This brings the company’s valuation to KRW 980 billion, and it could potentially attain unicorn status. Fashion commerce company Ably Corporation also secured KRW50 billion through venture debt and expects to become profitable within the year. APR, a beauty/fashion brand, raised KRW 8 billion in pre-IPO investment and is set to go public. Similarly, Guhada, a luxury platform, secured KRW8 billion, confirming that luxury platforms remain a popular sector. These companies’ ability to attract investment is due to their clear evidence of future growth potential, such as global expansion and profitability. With few companies securing Series C or later rounds this year, the funding they’ve secured will help them avoid ending the first quarter on a low note.

Investors are showing interest in early-stage fashion startups as well. Mineis, a platform that sells second-hand clothing, secured KRW41.5 billion at the seed stage alone, demonstrating the popularity of second-hand fashion platforms. Moreover, early-stage fashion startups offering eco-friendly solutions or technology-based services are becoming strategic investment targets for large companies. The number of beauty/fashion influencers starting up has also increased in recent years. Vertical services that focus on specific areas such as age and gender are gaining popularity too.

Despite the relatively large amounts of funding that fashion platforms are attracting, they’re also experiencing the fallout from the investment bubble of the past few years. This includes inflated valuations, mismanagement, employee layoffs, and missing leadership. With the current financial market uncertainty and economic downturn, startups need to be more cautious in their funding plans and management strategies. To attract investment successfully, they must demonstrate their potential for sustained growth.

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