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Korean startups raise record-high Series A funding in H1

Money is pouring into Korea's startup ecosystem, thanks to industry veterans, unicorns and fresh business ideas

By Aug 02, 2021 (Gmt+09:00)

AI startup Rebellions raised 20 billion won despite not having released a product nor a service.
AI startup Rebellions raised 20 billion won despite not having released a product nor a service.

South Korea's startup ecosystem has been booming with companies raising over 1 trillion won ($870 million) in the first half of this year -- an all-time high for the domestic startup scene.

At the center of this unprecedented boom are industry veterans that have moved over to the startup space to build their own startups based on fresh business models and technologies.

According to startup research firm TheVC, Korean startups raised almost 1.5 trillion won via Series A financing in the first half of this year, a sixfold increase compared to the first half five years ago.

Also, the number of domestic startups that attracted Series A funding rose from 75 companies in the first half of 2016 to 192 companies in the first half of this year. The average investment amount increased from 2.1 billion won to 5.5 billion won.

Series A is the first round of financing where venture capital firms make investments based on the startups' team and business models.

Graphics by Jerry Lee.
Graphics by Jerry Lee.

Even large business groups are turning to startups to foster their future businesses. Leading automaker Hyundai Motor Co. and platform giant Naver Corp. have selected startups to cultivate their new ventures such as self-driving cars and e-commerce operations.

Also, the country's three major mobile carriers SK Telecom Co., KT Corp. and LG Uplus Corp. as well as retail groups including CJ and Shinsegae have been searching for potential startup partners through D.CAMP, Korea's largest non-profit foundation for startups.


Domestic artificial intelligence startup Rebellions Inc. came into the spotlight for raising over 20 billion won ($17.4 million) without releasing a product nor a service -- and because it did so less than a year since its inception

Founded in September 2020, Rebellions secured funding from a pool of investors including Kakao Ventures and Shinhan Capital, which decided to invest solely based on the startup's founding team members who previously worked at global semiconductor companies such as IBM, ARM Holdings and Intel.

AI startup Voyager X Inc. and bio startup Imnewrun Biosciences Inc. also each secured 30 billion won in a Series A funding round in June and May, respectively, while edtech startup Ringle English Education Service and bio startup Panolos Bioscience both raised 20 billion won in their recent Series A rounds.

This is a drastic transformation given that Korea's top food delivery app operator Woowa Brothers Corp. secured 2 billion won in a Series A round in 2012. At the time, it made headlines as it was considered a sizeable investment for a startup.

But times have changed. These days, many startups have gone to raise 2 billion won or more in their early-stage funding rounds.

This year alone, several startups across a wide range of sectors secured over 10 billion won in Series A financing including blockchain startup Ramda 256, which raised 17 billion won; tax accounting startup The Check Inc., which secured 10.2 billion won and AI edtech startup ePopSoft Inc., which attracted 10 billion won.

Kim Moo-gung (left), head of mobile scanner app vFlat; Nam Se-dong, the co-founder and CEO of Voyager X; Chang Jae-wha (right), head of video editing software Vrew.
Kim Moo-gung (left), head of mobile scanner app vFlat; Nam Se-dong, the co-founder and CEO of Voyager X; Chang Jae-wha (right), head of video editing software Vrew.

The rise in serial entrepreneurs also helped boost Korea's startup ecosystem as it reduced the process of trial and error. The chief executives of AI startups Voyager X and Return Zero as well as homomorphic encryption startup Desilo Inc. are all seasoned startup founders.

And recently, startups have shown valuable results early on by pioneering new markets. For example, The Check, which aids digital transformation for small and medium-sized business owners, gained more than 200,000 users just 11 months from its release.

"The huge success of e-commerce giant Coupang Corp. and leading food delivery app service Woowa Brothers showed that startups can hit the jackpot if they have talented people and sound business models," said Kwon Do-kyun, the founder of Korea's first startup accelerator, Primer.

Earlier in March, Coupang became the first Korean company to list directly on the New York Stock Exchange. It made a successful trading debut with its shares rocketing 41%. In the same month, Woowa Brothers joined the 1 trillion won revenue club, driven by a sharp increase in online orders amid the pandemic.


Meanwhile, the soaring valuations of existing startups' have paved the way for early-stage startups' growth. Last month, Viva Republica Inc., the operator of Korea's popular digital wallet Toss, raised 460 billion won and received a valuation of around $7.4 billion, a sevenfold increase compared to its valuation from three years ago.

VC firm Bon Angels which invested 300 million won in Woowa Brothers as an angel investor saw its returns surge over 1,000 times.

“Recently, profits from innovative startups have been much higher compared to the traditional manufacturing and retail companies," said a VC industry official.

Last year, Korean VCs' newly committed capital reached around 6.7 trillion won in 2020, more than double compared to five years ago when it stood at around 2.7 trillion won.

Graphics by Jerry Lee
Graphics by Jerry Lee

According to the Korea Venture Capital Association, the increased investments into startups have ushered in a virtuous cycle that helps create new businesses.

Write to Joo-wan Kim, Han-gyeol Seon, Min-ki Koo and Jong-woo Kim at

Danbee Lee edited this article.

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