The way Korea handled the COVID-19 crisis has been praised globally, and startups have played a significant role. Korea has used technology to fight the virus’s spread, which affected countries across the globe in 2020. While the ongoing coronavirus pandemic impacted nearly all industries, Korean startup ecosystem has shown resilience, with local startups efficiently attracting investors’ funds.
Korea’s startups shine amidst the pandemic
The successful deployment of public-private partnerships and government policies has helped the Korean startup ecosystem to grow. However, the pandemic’s initial impact led to a drop in the number of investment deals in February 2020. The government’s efforts and the resilience shown by the startups helped the ecosystem to thrive even during this crisis.
In November 2020, Korea also held its biggest startup event, COMEUP 2020. Even though it was a virtual event, it saw participation from some top companies and brands. The event saw participation from 1076 startups from 88 countries, out of which 120 startups were selected as COMEUP STARS. Out of the 120 startups, 59 were Korean startups.
South Korea is home to eleven unicorns, according to CB Insights, a global research firm. This makes Korea the 5th largest flock in the world. Most successful startups are based in Seoul, and the city aims to become one of the world’s top 5 startup hubs by 2022.
Many startups were able to raise colossal funding even during the time of crisis. Superbin raised 20 billion Won as funding in the latter half of the year. The company develops solutions for recycling plastic debris. The funding round was led by TBT, Humax, a set-top box maker, and Fine Investment, an asset management firm. Superbin is now valued at 100 billion Won and has recently developed Nephron, a reverse vending machine that rewards people who recycle plastics.
Superbin is not the only startup that surprised the market by raising funding for its innovative model, even as the travel and tourism sectors were impacted the most but Myrealtrip was successful in raising 40 billion Won in July 2020. Altos Ventures led the funding round of this overseas travel packages company. The funding round also saw participation from Smilegate Investment and IMM Investment as existing investors and Axiom Asia Private Capital, Korea Development Bank, Tekton Ventures, and Partech Partners as new investors in this travel startup. The company shifted its focus to local products from overseas months, and its sales have quadrupled in recent months for the domestic market.
After the outbreak of coronavirus and the news of schools and colleges closing down spread, the Korean EdTech startups were the first to help and offered their products and services for free to ensure that students do not miss out on quality education. The Korean Minister of Education awarded a few startups in the education sector for their valued service to society.
An EdTech startup, an online educational platform operator, called Riid made most of the EdTech sector’s momentum during this ongoing pandemic. The company raised 50 billion Won from its investors. The company provides tutoring services for those who are preparing for the English test in the country. It has recently started deploying AI to advance its education system. The company plans to expand its global partnerships and roll out new services with the funding.
Besides travel and tourism, even popular fashion brands suffered a significant drop in sales. However, this crisis proved as a big opportunity for online fashion brands. Must It, a fashion startup, raised 15 billion Won and impressed its investors with an 80% growth rate. With social distancing and other restrictions in place, people were hesitant about using everyday services. Laundrygo, a startup that provides laundry service, started a no-physical contact service and managed to raise 17 billion Won. A grocery delivery startup that uses a marketplace to connect consumers with retailers called Kurly also managed to raise US$150 million as funding.
Seegene was one of the first Korean biotech firms to produce test kits for COVID-19. They received quick approval from the government, and their initiative was a significant achievement for both the company and the country in keeping the spread of the virus in check.
South Korean Startup Ecosystem Will Be The One To Watch Out For
The Korean startup ecosystem offers a distinctive future for the Korean economy. According to market experts, the Korean government’s efforts to boost the economy that has suffered during this crisis, startups with innovative technology and business models will continue to gather steam despite the ongoing COVID-19 crisis.
Keep an eye on one of the most vibrant startup ecosystems. South Korea will not fail to amaze you.
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