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[StartupRecipe] Korean Startup Funding Drops 77% in Q1 Compared to 2022

#Weekly Funding Overview

[Mar. 27 ~ Mar. 31]

The total funds raised by Korean startups of this week is KRW 51.9 billion.

StockkeeperFintech5.8 billionSeries ACKD Venture Capital, Shinhan Venture Investment, KT Investment, Englight Ventures, IBK Capital, Hyundai Technology Investment
InfoplusFintech2 billionSeries A bridgeDozn
TME TherapeuticsBIO-GrantTIPS
Unibest Investment ManagementInvestment Consulting-M&AInnofin
Xai LandProptech-Angel Investor
PetelPettech500 millionPre-Series AKbridge Investment
Mediwhale11.4 billionSeries BSBI Investment, Woori Venture Partners, BNK Venture Investment, Innopolis Partners, IPS Ventures
Ready PostProphtech-Rsquare
BreedingPet startup-GrantTIPS
DotdotdotSocial Metaverse4.4 billionPre-Series AKB Investment, Korea Investment Partners, Laguna Investment, BTC Investment
Root energyEnergy4.5 billionSeries ALighthouse Combine Invest, MYSC, Korea Development Bank, Hyundai Marine & Marine Insurance
BlastMedia/Content2 billionPre-Series ADSC Investment, Schmidt
APM CoinBlockchain6.5 billionDWF Labs
Bigwave RoboticsRaaS9.8 billionSeries AKB Investment, Mirae Asset Capital, Shinhan Venture Investment, We Ventures, A-Stone Ventures
IcoreManufacture5 billionSeries ASV Investment, Kolon Investment, Kodit
NuitPet startup-GrantTIPS
PetpeotalkPet startup-GrantTIPS
DeepsmartechMaterials-SeedBig Bang Angels, Korea Omega Investment

Major Funding

  • BigWave Robotics secures KRW9.8 billion investment in one year, bringing its total funding to KRW 11.3 billion. The company runs Marosol, a robotics-as-a-service (RaaS) platform, and has established partnerships with over 400 companies, making up 80% of domestic robotics solution providers. The new investment will be used to enhance its competitiveness in robotics solutions, improve its Solink technology, and develop a 24-hour nationwide service network. Marosol aims to achieve KRW 20 billion in sales this year.
  • Mediwale, a startup that specializes in medical artificial intelligence (AI), has secured KRW 11.4 billion in investment, bringing its total funding to KRW 15 billion. The company’s focus is on retinal AI technology, and it has developed a medical device named Dr.Eye. Dr.Eye can predict the occurrence of cardiovascular diseases through retinal scans. According to clinical data from over 70,000 patients across the world, Dr.Eye is capable of predicting cardiovascular disease risk at the same level as cardiac CT. Mediwale is currently in the process of seeking approval from the FDA to enter the U.S. market.
  • Stockkeeper, a company that operates the Cow investment platform, Bank Cow, and the beef brand, Soljikhanwoo, has secured KRW 5.8 billion in funding. Bank Cow offers investment opportunities in Korean cows with amounts ranging from KRW 40,000 to KRW 5 million. The platform is authorized to issue investment contract securities and token securities (STO) and is planning to introduce investment products for diverse livestock assets.

#Trend Analysis

Korean Startup Funding Drops 77% in Q1 Compared to 2022

Investment in Korean startups dropped by 77% in the first quarter of this year, down to KRW 775.7 billion from KRW 3.44 trillion in the same period last year (2022). This represents a 46% decrease compared to the same period in 2021. The decline in investment began in the first quarter of last year and has been on a downward trajectory since then. During the beginning of 2022, over KRW 1 trillion was being invested per month, while the first quarter of 2023 saw a total investment of less than KRW 1 trillion, highlighting the extent of the decline.

Notably, growth stage investments have been hit particularly hard. Investments above KRW 50 billion are now difficult to find, and no company raised more than KRW 100 billion in the first quarter of this year. Only 24 companies raised over KRW 10 billion, a figure more than three times lower than in the same quarter last year. The largest funder in Q1 was Kream, which raised KRW 50.6 billion, a significant decrease from the previous year’s Q1 when the largest funder raised KRW 175 billion.

Consumer tech companies received the most funding by sector, followed by software and bio/healthcare. Sector preferences remained relatively consistent between high and low investment years. Startups in fashion and luxury goods dominated the consumer tech space, but the amount invested per company significantly decreased due to valuations dropping. For instance, Ably Corp, expected to become a unicorn, raised KRW 67 billion in the pre-Series C stage in January last year, but only received a venture debt of KRW 50 billion in an additional round in March this year. The debt nature of the funding is not considered favorable for startups. B2B SaaS startups were preferred in the software space, while growing industries such as space, robotics, and semiconductors remained underfunded.

Despite the overall decline in investment, semiconductor fabless company Padoo emerged as a unicorn. This suggests that investors remain interested in companies with high growth potential despite the challenging investment environment.

This year, there has been news of startup restructuring, with some companies closing or being sold due to poor management. Some of these companies were potential unicorns, but this downturn is seen as an opportunity to improve the corporate body and identify promising companies for future investment.

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