Tech Scaleup South Korea – Report 2023

Scaleup South Korea continues on its sustainable growth trajectory, showing signs of maturity and excelling in all indicators.
South Korea hosts more than 1,500 scaleups able to cumulatively raise $55.8B.
In relation to the size of its overall economy, South Korea outperforms countries such as Germany, France, Spain, and Italy – with 2.9 scaleups every 100K inhabitants and 2% of GDP invested in the local innovation economy.
Moreover, the country has been able to produce a number of tech giants that are comparable to top tech ecosystems such as Israel.

Results such as these are not achieved by chance. Some key drivers include:

  • Exceptional government support
  • Government institutions participated in rounds accounting for about $9B (16% of the total). On top, there are plans to fuel the local investment scene with packages accounting for over $65B, in parallel with dedicated strategies and policies aimed at boosting deep tech.
  • Structural corporate engagement.
  • Recent changes in regulation allowed “chaebols” – large industrial South Korean conglomerates run and controlled by an individual or family – to set up CVC funds. This will add new corporate capital to be invested in the local scaleup ecosystem (currently already accounting for more than $17B).
  • Presence of tech giants.
  • 8 scaleups crossed the $1B threshold in capital raised. These success stories contribute to the growth of the local scaleup scene (+328 new scaleups in 2022, another +150 to be expected at the end of 2023).
  • High technology specialization.

Korean scaleups share the unique opportunity to be at the forefront of the AI revolution due to competitive advantage coming from manufacturing infrastructure data and a strong specialization in digital technologies.
This last point in particular deserves further attention.
As of 2023, we recorded 376 Korean scaleups developing AI-based technologies to be applied to several industries, in particular to the manufacturing and health care. They account for about one fourth of the total scaleup population of South Korea – a density that is unmatched by scaleup ecosystems worldwide.

In this report, we provide a deep-dive into the Korean AI scaleup scene, exploring the magnitude of the phenomenon, its current and future applications, and the main related government and corporate strategies.