[StartupRecipe] Did the Soonicorn Startups Achieve Unicorn Status?

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#Weekly Funding Overview

[May. 29 ~ June. 2 ]

The total funds raised by Korean startups of this week is KRW 210.9 billion.

Company	Industry	Amount	Round	Investors
Movensys	Motion control solutions	-		MITSUBISHI ELECTRIC
Timesoft	AI bigdata	2 billion		Union Community, Hamajima system
Urbanlabs	Altprotein	-	Grant	TIPS
42Maru	AI	-	Grant	Post TIPS
Gentle farmers	Food fullfillment	-	Pre-Series A	New Paradigm Investment
Kitronyx	Pressure mapping	1 billion		Bigbang Angels
Powertask	Nocode solution	-	Pre-Series A	Korea Investment Accelerator
Addd	Digital AD	-	Series A	Shinhan Asset Management
Beyond Music	Fintech	200 billion		Praxiscapital
Lynens	B2B Laundry	-	Seed	Bon Angels Venture Partners
Gomi Energy Delivery	Energy distribution	700 million		The Invention Lab
Laboon	NFT	-	Seed	ISKRA
Codime	Fashion	-	Seed	Bon Angels Venture Partners
UUUUU	Nail brand	-	Grant	TIPS
Decant	Upcyclying	-	Grant	TIPS
Fluentt	3D Aavata motion capture	-	Grant	TIPS
Ecoinenergy	Eco energy	2.2 billion		Hanwha Investment & Securities, MYSC

Major Funding

• Beyond Music, a specialized investment and management company focusing on music intellectual property (IP), has raised KRW 200 billion in investment, catapulting its cumulative music assets under management to an impressive KRW 500 billion. With a keen focus on the music IP sector, Beyond Music has acquired the rights to over 27,000 songs from renowned singers, further solidifying its position as a prominent player in the industry.
• Eastend, a fashion branding company, has secured KRW 5 billion in investment and amassed a total funding of KRW 13 billion. Leveraging a direct-to-consumer (D2C) approach, the company operates five distinctive brands of its own. Eastend’s cumulative transaction value has surpassed KRW 50 billion as of 2022, achieving an annual growth rate of over 90%.
• Ecoinenergy, an environmentally conscious energy company, has secured an investment of KRW 2.2 billion. The company specializes in the production of high-quality pyrolysis oil and takes pride in its advanced technology in this field. Notably, Ecoinenergy’s pyrolysis equipment is modular in design, making it adaptable for installation in spaces of various sizes.

#Trend Analysis

Did the Soonicorn Startups Achieve Unicorn Status?

The investment climate is taking a toll on the startup ecosystem, leading to a slowdown in the number of startups able to attract investments and attain unicorn status. As of May this year, only one unicorn has emerged, a sharp decline compared to the seven unicorns that emerged in the first half of the previous year. During these challenging times, the government’s investment support plays a crucial role in empowering startups. In response to the situation, the government launched the K-Unicorn project in 2019 with the aim of assisting domestic startups in making the leap to unicorn status. This initiative involves identifying and selecting pre-unicorns and baby unicorns, providing them with the necessary resources for growth. By 2022, a total of 97 pre-unicorns had been chosen, and the announcement for this year’s selection is expected to be made soon.

The performance of the companies chosen as Soonicorns has been significant. Six of these companies, namely RIDI, Kurly, Padoo, Korea Credit Data, Tridge, and Zikbang, have successfully achieved unicorn status. Additionally, Jeju Beer, iGAWorks, NeuroMecca, and Wantedlab have chosen to go public. Many of these companies have emerged as leaders in their respective industries, with notable examples including Smartstudy, MyRealTrip, StyleShare (acquired by Musinsa), Backpacker (Ideas), Able Corporation, and Channel Corporation. Semifive and Stradvision have made commendable advancements in system semiconductors and autonomous driving technologies, respectively. Others, such as Tridge, have made remarkable contributions by becoming the first unicorn in the agriculture sector, while MusicCow has paved the way for a new investment market focused on music IP carve-outs.

However, even those companies that showed promising growth have faced challenges in the current investment market. Kurly, for instance, attained unicorn status but experienced setbacks such as a decline in corporate value and delisting. Similarly, Fresheasy, a leading meal kit company, has encountered delays in its listing process. Many companies have been compelled to announce restructuring plans due to deteriorating management conditions. Zikbang, despite its acquisition of Samsung’s SDS Home IoT division, has struggled and had to lay off employees due to labor cost pressures. Ruiid, which received a substantial investment from SoftBank, and MCN leader Sandbox Network have revealed plans to prioritize improving profitability through restructuring efforts. South Korean OTT platform Whatcha has encountered operational challenges, facing difficulty in attracting investments, a significant drop in enterprise value, and operating losses. MeshKorea, the operator of the delivery service Vroong, had to be sold to HY to undergo a reorganization process after failing to attract investments and facing internal management conflicts. Moreover, Healing Paper and Law & Company are currently grappling with conflicts with professional organizations such as the Korean Medical Association and the Korean Bar Association, respectively.

These examples highlight the influence of various factors, including the external environment, on the survival and success of startups. Merely achieving unicorn status does not guarantee long-term security, and attracting substantial investments does not ensure continuous growth. In recent years, securing survival funding has become increasingly challenging for startups as investors prioritize profitability. Consequently, it becomes crucial for startups to establish a solid foundation that can withstand the impact of multiple variables and stabilize their business in the face of adversity.