According to our latest “Tech Scaleup South Korea Report 2022”, the scaleup ecosystem in South Korea has reached a level of maturity that places it on par with some of Europe’s leading countries. In fact, our data reveals that South Korea now boasts 1,214 scaleups, compared to France’s 1,957 and Germany’s 1,406. Moreover, South Korean scaleups have raised a total of $48.2 billion in capital, outpacing France’s $40.9 billion, and coming in just behind Germany’s $55.4 billion. This is a clear indication that South Korea’s tech sector is rapidly evolving and becoming an increasingly attractive destination for investors seeking promising opportunities.
South Korea’s scaleup ecosystem is not only thriving, but it’s also rapidly expanding and poised to overtake the UK in the near future. Despite the gap existing in 2020 compared to many countries, South Korea has made impressive strides, surpassing both France and Germany in Scaleup Investing Ratio and number of Scalers, a very significant result in such a short span of time. This upward trajectory is indicative of the innovative and dynamic nature of South Korea’s startup ecosystem, positioning it as a major contender on the global stage.
A high commitment from Government
South Korea is rapidly emerging as a powerhouse in the startup ecosystem, with the government’s unwavering support as a driving force behind its impressive growth. In fact, the South Korean government is investing a whopping $11B into the country’s startup ecosystem in 2023 – an amount equivalent to 0.6% of the country’s GDP. This has resulted in a surge of 13 unicorns in South Korea, surpassing neighboring country Japan, which has only 6 unicorns.
But the government’s commitment to promoting innovation and entrepreneurship in the country is not limited to just startups. In fact, the budget is also allocated towards encouraging large companies to engage in open innovation activities, further boosting the market.
South Korea is an ideal region for large companies to source startups, thanks to the unwavering support from the government. With such a high level of commitment from the government, South Korea is definitely a hot place to keep an eye on for investors and entrepreneurs alike.
K-culture and Metaverse
K-culture, encompassing everything from K-pop to K-contents. In South Korea, the digital media and gaming industries have emerged as hotbeds of innovation, with 16% of the country’s scaleups calling these sectors home. And now, with the Metaverse taking center stage, these industries are evolving into a stronger digital technology landscape that includes 3D content creation, augmented reality, audio-video, and streaming and broadcasting.
According to our research, 109 Metaverse scaleups (9% of the total) were identified in South Korea in 2022, a scaleup density that’s 3-4 times higher than that of Silicon Valley and the UK (3%). It’s clear that South Korea is emerging as the land of the Metaverse.
Our advice to large corporates and investors is to keep a close eye on tech startups emerging from South Korea, as the country has a long history of quickly adapting to new technologies and making them smaller, cheaper, and faster. Samsung, LG, and other major corporations are just a few examples of how South Korea has consistently been at the forefront of technological innovation.
So, don’t miss out on the opportunity to partner up with the country’s thriving startup ecosystem: save the date for our next Scaleup Summit South Korea taking place in Seoul on June 1st and 2nd (as part of the largest conference on Startups and Open Innovation for the region, NextRise 2023).
Sun Choi is a managing director of Asia at Mind the Bridge, supporting Asian startups to enter the global market. Previously contributed 2 startup exits – 1 IPO, ! M&A. Worked as a management consultant for Japanese Forbes500 companies.
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