#Weekly Funding Overview[Aug. 14 ~ Aug. 18]
The total funds raised by Korean startups of this week is KRW 132.3 billion.
|New Paradigm Investment
|VNTG, Moonlight Partners
|LSK Investment, Magna Investment, Dreamstone Private Equity, Wooshin Venture Investment
|Korea Credit Data
|Morgan Stanley Tactical Value
|Star Ventures, SK Securities, IPS Ventures
|Big Uncle company
|Series A bridge
|Accentri Ventures, Gyeongnam Venture Investment, Samsung Securities
|Busan Technology Holdings
|Hibe, YG Plus, YG Investment, JYP Entertainment
|DSC Investments, Stick Ventures, KODIT, SW Investment
|Capstone Partners, Samsung Next, KB Investment, KDB Development Bank, Strong Ventures, Primer, NexTrans
|Anda Asia Ventures, Future play
- Korea Credit Data has secured an investment of KRW 1000 billion. Their flagship service, ‘CashNote,’ provides functionalities like bookkeeping, customized financial solutions for businesses, an exclusive marketplace for entrepreneurs, information on small business support policies, and a dedicated community for business owners.
- Pillyze, a personalized nutrition and diet management platform, has attracted an investment of KRW 120 billion . Using highly personalized AI (Artificial Intelligence) technology, they specialize in individualized health analysis, including body composition analysis and genetic testing. They plan to expand their team of healthcare professionals.
In recent times, a noticeable decline has gripped the world of startup investments, touching virtually every sector. Yet, one area that has felt this contraction acutely is the realm of edtech startups. According to data from Startup Recipe, in the current year, investments flowing into the edtech sector have barely managed to breach the KWR 40 billion mark, with the largest investment size falling conspicuously short of KRW 10 billion.
The heyday for edtech startups, it seems, was in the year 2021. This was a time when they gleamed in the limelight, benefitting immensely from the rapid transition to digital education brought about by the relentless sweep of the COVID-19 pandemic. Those startups boasting robust digital offerings became the darlings of investors, seizing significant attention and a bounty of investment opportunities as the education arena underwent a seismic shift towards the online realm. However, in more recent years, many of these startups, despite their initial success in attracting substantial investments, have found themselves struggling to secure follow-up funding, all against the backdrop of a broader investment downturn. Furthermore, the emergence of novel startups introducing innovative models has become increasingly rare, further perpetuating the downturn. Adding to the woes, the lofty corporate valuations achieved during the golden era have been eroding at an alarming pace. Certainly, funding for edtech startups has been steadily declining year by year, dropping significantly from its peak at KRW 5.162 billion in 2021 to just KRW 2.53 billion in 2022. If the present trend continues, reaching a modest KRW 20 billion this year could appear to be an exceedingly challenging endeavor. The reasons behind this slump can be traced to the overall reduction in investments, largely attributable to economic headwinds. However, it is also entangled with the waning appetite for online learning as the pandemic’s grip loosens, coupled with lingering doubts about the profitability of these ventures. The conspicuous absence of edtech startups that can demonstrate a profitable track record stands out as a major deterrent to prospective investors.
Amid these formidable challenges, the downturn in hobby-centric online education platforms, which were the beneficiaries of substantial funding during the investment frenzy, casts a long shadow over the entire edtech market. For instance, Classes101, once aspiring to unicorn status, has been compelled to undergo significant restructuring and recently faced public censure for unpaid rent. On the other side of the spectrum, Taling reported profits but had to embark on a substantial downsizing of its workforce. The exorbitant costs associated with user acquisition, with a substantial portion of investments siphoned into advertising, have proved to be a formidable obstacle in the path to profitability. Consequently, tales of edtech platforms achieving positive profitability remain as elusive as the proverbial needle in a haystack, particularly within the realms of adult education, childcare, coding instruction, and similar domains.
Nevertheless, there exists a glimmer of hope in the form of AI-based edtech companies. These enterprises have harnessed the power of artificial intelligence to revolutionize learning paradigms or provide cutting-edge educational support tools, thereby enhancing the efficacy of the educational process. They harbor ambitions of showcasing their growth potential on a global stage, setting their sights beyond domestic boundaries.
The edtech slump, it should be noted, is not confined to domestic markets alone. According to insights from CBInsights, investments in edtech startups during the first half of this year have seen a precipitous decline of 23%. Furthermore, even in the international arena, edtech companies find themselves in a lackluster performance rut, with unicorn companies grappling with dwindling valuations and a conspicuous dearth of successful initial public offerings. While investment downturns continue their inexorable march globally, the sheer magnitude of the education market and the relentless march of technological progress suggest that growth prospects are still within reach. Nevertheless, the precise moment when this recovery will materialize remains shrouded in uncertainty, particularly in light of the ongoing economic convulsions that define our times.