Korea’s AI, robot startups shine despite funding drought

South Korea’s artificial intelligence and robotics startups raised more money through seed rounds than other sectors in August although investors continued to tighten their purse strings.

Holiday Robotics, a developer of AI humanoid robots for manufacturers, secured 17.5 billion won ($13 million) last month through a seed round, or a financing round for initial capital to start a business, according to venture capital industry sources on Monday. That was the largest seed round fundraising among startups in the first eight months of the year.

The startup established by CEO Song Kiyoung, a co-founder of another South Korean AI startup Sualab Co., along with other AI and robotics experts in April is currently focusing on developing an elaborate robotic arm.

“The company has talent in both AI software and hardware controller development, which is critical for humanoid robots,” said Stonebridge Ventures Chief Investment Officer Choi Dong Youl, who led the seed round.

AI SECTOR ABSORBS MONEY

AIZ Entertainment Corp., which is building a platform for communication between users and AI virtual humans, raised 16 billion won through a seed round last month.

The startup founded by Namkoong Whon, the former CEO of South Korea’s major online platform Kakao Corp., provides services that allow users to create and customize their own AI characters.

Beeble Inc., an AI virtual studio operator for filmmakers, secured seed capital of 6.5 billion won, while Sionic AI Inc., a generative AI solution developer, raised 5.5 billion won in August.

Trillion Labs, a large language model (LLM) startup specializing in Korean, and Coxwave, a corporate AI solution developer, raised 5.4 billion won and 4.5 billion won, respectively.

DECLINING OVERALL SEED INVESTMENT

Those robots and AI startups succeeded in raising money through seed rounds although overall investor sentiment remained sour.

Seed investments shrank to 137.1 billion won in 295 startups in the January-August period from 168.3 billion won in 455 companies a year earlier.

Venture capitalists and other investors focused on startups with solid business models and expert employees, given the sustained funding drought, industry sources said.

“Only proven entrepreneurs with track records of successful exits secured large seed money,” said an investment banking industry source.

Write to Eun-Yi Ko at koko@hankyung.com
 
Jongwoo Cheon edited this article.