Rising to Innovation Powerhouse
South Korea is accelerating its growth as a global powerhouse in the “innovation economy”.
All measures of growth are pointing in the same direction: only compared to last year’s figures the total capital raised ($28.9B) has increased +51.5% from 2019, with a 25.6% increase of total number of scaleups (889). According to our research, its throughput places South Korea for the first time ahead of historically rooted R&D powerhouses like Germany.
Most importantly, the growth speed of some of the largest scaleups is quite a unique trait of the South Korean system. South Korean tech giants (super scalers) grow fast: on average, they are 6-7 years old (average founding year is 2014), while their European counterparts are about 9 years old (average founding year is 2012). The beginning of 2021 has already seen the graduation of some of the most promising scaleups of the country into real new tech phenomena. E-commerce giant Coupang has debuted at the New York Stock exchange IPO, with a whopping valuation in the $100B cap (compared to the latest round that valued the company at $9B in 2018). Kakao Bank seems to be moving into similar territories.
Since 2014, the South Korean ecosystem has received growing attention from foreign investors.
Currently, more than 50% of the VC investments inflowing into the country come from mainly Japanese, US, and Chinese investors. All while the IPO channel in South Korea is becoming increasingly considered as a viable option for scaleups to raise growth capital. We record 71 scaleups that raised $8.6B (a whopping 30% of the total funding) on the stock markets.
It should come as no surprise that South Korea is recently becoming increasingly attractive for international corporates looking to expand their open innovation operations abroad. In the last five years alone, we record 32 new Open Innovation Outposts set up by the top Fortune/Forbes global corporate giants – four times more than the average of the previous decades. A hub for global R&D, especially in the beauty, cosmetics, and pharmaceutical industries – traditionally strategically relevant in the Asian country – South Korea is increasingly becoming interesting for corporates from all over the globe looking to establish a leaner presence in the area.
There is definitely room for (further) growth in South Korea, and we’ll make sure to continuously monitor its progress. Currently, we can safely say that the country’s innovation scene is experiencing a never-seen-before momentum
Alberto Onetti, Chairman, Mind the Bridge
Marco Marinucci, CEO, Mind the Bridge