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Deep Tech Drives South Korean Venture Investment

Photo by joongil Lee / Unsplash

Seoul, South Korea - South Korea's venture investment market showed impressive resilience in 2023, outperforming global trends, according to the Ministry of SMEs and Startups.  

The government highlighted robust investment flows and venture fund formation as key drivers.

Signs of recovery

  • Venture investment figures reached KRW 10.9 trillion ($8.37 billion) in 2023, surpassing pre-pandemic levels and setting a new record (excluding extraordinary growth in 2021-22).
  • Investment figures rose steadily throughout the year, indicating a sustained recovery.
  • South Korea saw a limited decline (12%) from the 2022 total, in contrast to the significant decrease in the US and Europe.

Focus on Deep Tech

  • Investment shifted away from pandemic-driven areas such as contactless services and biotechnology.
  • Funding surged in "deep tech" sectors such as AI, semiconductors, and robotics (ICT manufacturing was up 63%, and electrical/mechanical sectors were up 40%).

Momentum in Venture Fund Formation

  • Domestic venture fund formation totaled KRW 12.8 trillion ($9.83 billion) in 2023, up 28% from pre-pandemic levels.
  • Fundraising also showed quarter-on-quarter growth throughout the year.

Government support

The Ministry of SMEs and Startups plans to inject KRW 910 billion ($699 million) in policy funds into venture funds in the first quarter of 2024.

A public-private "Startup Korea Fund" is planned to accelerate market growth.

Programs to promote partnerships with foreign VC firms are expected to strengthen the sector further.

Minister of SMEs and Startups Oh Young-joo commented: 

"In 2023, the domestic venture investment market showed excellent recovery capabilities compared to major overseas countries, and we plan to mobilize all appropriate policy measures to continue the good atmosphere."