Korea's AI startup Upstage raises $72 mn for global expansion

Upstage, South Korea’s artificial intelligence startup, raised about 100 billion won ($72 million) in its latest funding round, which the company will mainly use to win more orders for its AI programs from overseas enterprises, the company announced on Tuesday.

According to Upstage, its fresh funds raised during a Series B round were three times bigger than its previous Series A funding completed in 2021.

Combined with the latest funding, the Korean startup has so far raised nearly 140 billion won from investors, the biggest funding for a Korean AI software startup, Upstage said.

Its new backers include Korea Development Bank, SK Networks Co. and Shinhan Venture Investment Co., while its existing investors such as SBVA, formerly known as SoftBank Ventures Asia, and Primer Sazze Partners also took part in the latest funding round. 

The Korean AI startup plans to use the fresh proceeds to speed up its global push mainly focusing on the US market, where it has recently opened new operations, the company said.

Upstage won about 10 billion won worth of new orders for its intelligence document processing AI solution Document AI and Solar large language model (LLM) API in the first quarter of this year. This was twice as much as its entire orders for all of last year.  

It is currently in negotiations with various customers at home and abroad to deliver its AI programs in new deals worth about 30 billion won.

KOREA’S VALUABLE AI STARTUP

Upstage rolled out Document AI in the first half of last year and Solar LLM in the latter half.

The company said its successful funding underscores the stellar performance of Document AI and its pre-trained LLM Solar.

In particular, the Solar foundation model is now available for customers using Amazon SageMaker JumpStart as it “outperforms and uses its compact size and powerful track records to specialize in purpose-training, making it versatile across languages, domains and tasks,” said Amazon Web Services Inc. early this month.

The Solar LLM API suite generates natural text, ideal for chatbots or content creation; offers high-fidelity translations for multiple languages; effectively summarizes lengthy documents; verifies the accuracy of automated responses; simplifies coding tasks with natural language commands; and transforms textual data into numerical vectors.

Developers around the world have already developed about 1,000 fine-tuning LLM models based on the Solar LLM, creating a new ecosystem.

ACCELERATION OF GLOBAL PUSH 

Upstage set up its US entity at end-February to offer its AI programs to more global enterprises, according to the company.

Its co-founder and Chief Science Officer Park Eunjeong heads the US operations, while Upstage CEO Kim Seong-hoon and Chief Technology Officer Lee Hwalsuk are spending most of their time in the US these days to win orders for Upstage's new large language model Solar Mini (sLLM).

“With the latest funding, we will strive to grow into a global player after making substantial achievements not only at home but also in foreign markets including the US, Japan and Southeast Asia,” Upstage CEO Kim said in a press release.

Global race to win the generative AI market has heated up since the debut of OpenAI’s ChatGPT.

Korea also has several AI startups, like Upstage, actively seeking to grab a piece of the global generative AI pie expected to skyrocket. 

Write to Joo-Wan Kim at kjwan@hankyung.com

Sookyung Seo edited this article.