Scaleup South Korea: Time is Now

As an Innovation Advisory firm, a good amount of our energy is spent crunching data, studying, in particular, how the ecosystems of innovation are evolving around the world.
Our valuation of the “scaleup economy” of a country represents a key element to assess both its current size and internal dynamics but also a baseline to compare with other economies, using similar metrics. This is the scope of this report. On one side, presenting a snapshot of the size of the ecosystem of scaleups (more mature startups), on the other side finding insights of where this ecosystem is headed.

The findings of the reports place South Korea in a pretty unique position, when compared to other developed economies:

  • The Korean ecosystem is finally entering the “Scaleup phase”. Starting 2017 we witnessed a remarkable step-up in terms of new scaleups and even more in terms of capital invested.
  • The ecosystem is young but accelerating: almost half (46%) of South Korean scaleups have been founded in the last 5 years, while the large majority (86%) is not older than 10 years.
  • The amount of capital invested into Korean scaleups (0.74% of GDP) is above the European average (0.66%), and established players such as Germany (0.59%), and France (0.61%).
  • The amount of “big-hits” (Scalers and Super Scalers able to raise over $100M and $1B respectively) is top performing, in particular based on the size of its population.
  • The amount of “exits” through IPO is larger than any other European country, making South Korea a very fertile geography to create hefty returns for shareholders.
  • The vast majority of venture capital invested (74%) into Korean scaleups come from abroad, largely from Japan and the US.
  • The dominant geographical aggregation of scaleups in the capital city of Seoul, consistently with the trend we register in many European countries (UK, France).

All the above seems to point to the same direction: the very visible Government’s effort to create a healthy, growing and self-sustainable startup ecosystem, seems to be paying off.

While in our methodology we tend to shy away from the logic behind the solo counting of Unicorns (whose market evaluation is often very volatile), and we rather base our ranking in the amount of funds raised and other variables, South Korea seems to hit on all cylinders lately: a growth in funding, exits and, yes, also the always resounding, number of “Unicorns”.

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