[StartupRecipe]South Korea’s projected venture investment recovery in the first half of 2024

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#Weekly Funding Overview

[April. 10 ~ April. 14]

The total funds raised by Korean startups of this week is KRW 63 billion.

Company	Industry	Amount	Round	Investors
AENTS	Climate tech	2 billion	Series A	Invisioning Partners, Smilegate Investment
Earlypay	Fintech	-	Seed	Seoul Techno Holdings, MYSC, Kiwoom Investment
S- materials	Materials	-	Grant	TIPS
CLA Corp.	Creator matching	-	Grant	TIPS
Hatchery	Agriculture	-	Grant	TIPS
CURRENTIVE	K-Beuaty	-	Seed	Wishcompany
Episoden	Education	-		DT&Investment, Colopl Next
Smartcelllab	Bio	2 billion	Series A	Suheung, DK&D
Epigen	Bio	-	Grant	TIPS
Myfair	Fair registering solution	-	Grant	TIPS
Taxby	Tax	-	Grant	TIPS
Sengdo	Lifestyle brand	-	M&A	Prain Global
Nudge healthcare	Healthcare	30 billion		Korea Investment Partners, Shinhan Capital, Shinhan Investment & Securities
Worker's High	Proptech	-	Pre-Series A	Lotte Ventures, Lotte Chilsung, Hanyang University Technology Holdings, ROI Investment Partners
SAPEON	Hyper-Cloud AI Processor	-		GS E&C, GS Neotech, Daebo Group
Algocare	Healthcare	-		D.CAMP
Jarasoft	Design SaaS	-	Seed	The Invention Lab
Payhere	POS	20 billion	Series B	Goodwater Capital, Smilegate Investment
Nei&Company	Mobility	800 million		NBH Capital, MYSC
Munto	Community Platform	5.2 billion	Series A	IMM Investment, Daekyo Investment, Bon Angels Venture Partners, Z Venture Capital
Foodnote service	Digital management platform	3 billion	Series A bridge	Tigris Investment, Haesung Investment
HIGHERX	Gig worker platform	-	Grant	TIPS
Headless	headless commerce D2C SaaS	-	Grant	TIPS

Major Funding

• Nudge Healthcare has secured its initial investment of KRW 30 billion. In 2017, the company released its healthcare app, Cashwalk, which rewards users with points based on the number of steps taken. In the previous year, the firm’s combined revenue surged 39% to reach KRW 79 billion, while its operating profit increased 12% to KRW 10 billion. Furthermore, overseas sales jumped 227% compared to the previous year. The funds raised from this investment will be utilized to expand Nudge Healthcare’s presence in international markets.
• PayHere has secured KRW 20 billion in funding, bringing its cumulative investment to KRW 35 billion. The company was established in 2020 and offers a cloud-based point-of-sale (POS) service that facilitates store management activities such as delivery, marketing, kiosk, waiting, table ordering, and kitchen display system (KDS). Additionally, PayHere consolidates order, payment, and customer data into a single platform for enhanced convenience.
• Munto, a platform that fosters interest-based communities, has secured KRW 5.2 billion in investment, bringing its total cumulative investment to KRW 7.2 billion. Since its launch in January 2021, Munto has amassed 520,000 cumulative members, recorded 180,000 cumulative community opens, and 100,000 cumulative feeds in just 25 months. With this latest investment, the company aims to transform into a comprehensive super service that facilitates interest-based exchange, information sharing, and even marketplace functionalities.

#Trend Analysis

South Korea Expects Venture Investment Recovery by 2024

The South Korean government has projected a period of recovery for venture investment in the country, expected to take place in the first half of 2024. The Ministry of SMEs and Startups relayed in a press conference on investment trends that while the amount of venture investment and fundraising fell last year, it should not be viewed as a negative development.

This is because Korea’s investment decline was less significant, clocking in at 11.9%, than other major countries, such as the United States (30.9%) and Israel (40.7%). As a result, investment sentiment is expected to bounce back in the first half of 2024, as economic conditions improve.

A government survey revealed that venture capitalists invested KRW 6.8 trillion in Korea in 2022, marking an 11.9% decrease from 2021. and Startuprecipe’s investment report also indicated a 9.9% drop in investment in 2022 compared to 2021.

The government addressed concerns about the domestic venture investment market shrinking, explaining that it is presently undergoing a process of normalization following the expansion of liquidity due to fiscal policies during the 2021-2022 coronavirus pandemic. As the market was overheated in 2021-2022, the base effect is large. Therefore, 2019-2020 is considered the normal investment level, while 2021 was an overly active investment market.

The government recommended utilizing this time as an opportunity to adjust overvalued corporate values and select and support promising startups, as doing so would result in a healthier venture ecosystem. By making these adjustments, overvalued corporate values will be brought in line, leading to further growth in the venture ecosystem.

In addition, the government announced earlier this year its plan to leverage incentives to drive investment, taking a proactive stance in promoting economic growth. As part of this initiative, managers who meet the investment target ratio, which is 40% in the first year after registration, 70% in the second year, and 90% in the third year, will receive additional management fees. They will also receive points for selecting projects to invest in for the parent fund in the following year.

These measures are expected to promote the establishment of private venture capital funds, thereby fostering a more conducive environment for investment. In recent times, the Cabinet approved a bill to amend the Venture Investment Act, which permits the establishment of private venture capital funds.

Through these developments, the government aims to drive economic growth and build a more vibrant venture capital ecosystem that facilitates the growth of promising startups. By leveraging incentives and policy measures, it hopes to create an environment that attracts more investors, thereby spurring investment in the country’s burgeoning startup scene.