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[StartupRecipe] Taking Longer to Reach Series B Funding from A

#Weekly Funding Overview

[June. 19 ~ June. 23]

The total funds raised by Korean startups of this week is KRW 126.46 billion.

LevitEcommerce60 billionSeries BDST Global Partners, Bond Capital, KB Investment, Mirae Asset Capital, Mirae Asset Venture Investment, Korea Investment Partners, GS Ventures, GS, Klim Ventures
Atto researchSoftware Defined Network10 billionSeries C
DotslashdashContent Platform5 billionPre-Series A BridgeSlanders
WedatalabMonitoring solution-CNTTech, DB Capital
LetsurNocode-SeedStonebridge Ventures, Smilegate Investments, Schmidt
Horizon technologyFintech-Pre-Series AGoodthings
GallopingSoccer Training-GrantTIPS
ChopsticksArt commerce-GrantTIPS
MangoplayCreator commerce-SeedKODIT
RiadTravel-SeedFuture Play
Rina solutionSafety monitoring-GrantTIPS
HnPowerEnergy3 billionSungkwang
Ciel mobilityMobility5 billionSeries APathfinderH, KODIT, Hanwha Investment & Securities
Creative Digital labEducation-SeedKorea Investment Accelerator
Madeleine MemoryB2B Secondhand Solution-GrantTIPS
RevationEco friendly Packaging-Pre-Series AKorea Investment Accelerator, Yuhan Kimberly Green Impact Fund, S Cubic Angels, PRISM, Hanyang University
Orum therapeuticsBio26 billionSeries C bridgeCrystal Bioscience, Stick Ventures, KB Investment, IMM Investment, Intervest, Premier Partners, Starset Investment
ConnecteveDigital Healthcare-GrantTIPS
MR.DadFood-Hite Jinro
Gadet KoreaRoaming-Hite Jinro
InfludeoKpop2 billionSeries AKorea Investment Partners, SB Partners, Laguna Investment
Persona.aiAI2 billionHyosung Ventures
BetterwhyBattery2 billionHyosung Ventures
UrbanplayLocal Content7.6 billionSeries BMurex Partners, Lotte Ventures, Smart Study Ventures
Easy ChargerElectronic car charging500 millionHyundai Industrial
Fridays labMarketing solution1.16 billionPre-Series A Bridge
Liquid nationSocial app-SeedBass Investment, Good Water Capital
Radius2.2 billionPre-seedHashed, Superscript, Lambda Class,

Major Funding

  • Levit, the operator of Allways, a team purchasing commerce platform, has secured KRW 60 billion in investments. They plan to leverage this capital to introduce a discovery-commerce model that utilizes low-priced products and recommendation algorithms to drive purchases. Their goal is to rapidly increase market share in the domestic commerce market and expand globally to establish a leading position in the discovery commerce sector.
  • Attoresearch has received KRW 10 billion in investments, bringing their total cumulative investment to KRW 30 billion. With their expertise in domestic cloud solutions powered by OpenStack, they are poised to expedite the establishment of Software-Defined Data Centers (SDDC) using cloud technology with this funding. Additionally, they have plans to expand their operations by acquiring a data center operating company in the second half of this year.
  • UrbanPlay, a city culture content platform, has secured KRW 7.6 billion in investments, surpassing a total investment of KRW 17 billion. Their objective is to develop a comprehensive content business platform encompassing offline content investment, production, distribution, and operation with the newly acquired funds. Additionally, they have plans to enhance investments in creator intellectual property (IP) and expedite initiatives beginning this year.

Taking Longer to Reach Series B Funding from A

Startups are facing lengthier delays in securing funding for their next stage as the investment climate deteriorates. The slowdown can be attributed, in part, to a shift in investor sentiment, where funding is becoming less readily available. Additionally, startups, whose value is diminishing, are finding it challenging to negotiate favorable investment terms and are thus biding their time for optimal conditions to solidify their foundation. While several factors may be at play, one notable trend is the increased duration it takes for startups to successfully raise funds for their subsequent investment stage.

According to data from Startup Recipe, based on the first half of the current year, Korean startups that managed to secure Series B investments took an average of slightly over 30 months to progress from Series A to Series B. In the active investment period during the first half of 2021, this duration averaged 19 months, which subsequently extended to approximately 26 months in the latter half of 2022 as investments began to decline sharply.

A direct comparison between the first half of 2021 and 2023 reveals a significant 10-month disparity in reaching the Series B stage. Such a divergence can intensify financial pressure on startups. Furthermore, the number of startups reaching Series B has plummeted by more than half compared to the latter half of 2022, underscoring a deceleration in growth-stage investments.

Nevertheless, it is worth noting that certain prominent startups are not unduly influenced by external circumstances. Even in the face of challenging conditions, some companies have rapidly progressed to the Series B stage. An exemplary case is Revit, a mobile commerce company that recently secured a 60 billion won investment. Revit achieved Series B funding a mere nine months after obtaining Series A2 investment. Since its establishment in 2021, Rev-It has experienced swift growth as it enters its third year. Similarly, Payhere, an advocate for store management digitalization, successfully attracted Series B investment just one year after completing its Series A funding.

Numerous other companies complete the transition from Series A to Series B investments in under a year. Noteworthy examples include KREAM, Green Labs, Seloin, Doctor Now, Jarvis & Villains, Inno Space, Reco, Vinssen, Imago Works, Flex, ASleep, Rapporlabs, and more.

While prospects for an improved investment environment may not appear immediately evident, there is a growing trend of companies attracting substantial funding compared to earlier this year. Investments are flowing into specific sectors such as AI semiconductors or companies that have overcome losses and are fortifying their foundation. This signifies continued investor interest in startups with significant growth potential. By astutely leveraging the current environment and strategic investment timing, startups can sustain their growth trajectory even amidst an extended dry spell in investments.

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