Subscribe to Our Newsletter

Success! Now Check Your Email

To complete Subscribe, click the confirmation link in your inbox. If it doesn’t arrive within 3 minutes, check your spam folder.

Ok, Thanks

Korean Startup Ecosystem: Mind the Bridge diagnosed it as a scale-up stage.

Philip Lee profile image
by Philip Lee
Korean Startup Ecosystem: Mind the Bridge diagnosed it as a scale-up stage.
Photo by Yohan Cho / Unsplash


Mind the Bridge(MTB) diagnosed the South Korean startup ecosystem as entering the “Scale-up” stage.

As a result, the firm published “Tech Scaleup South Korea – Report 2020” with KITA. Here are the key points about the South Korean startup ecosystem.

South Korea is a runner-up in the globe.

MTB categorized the startups into 4 phases by the total funding raised amount: Startup, Scale-up, Scaler, and Super Scaler.

  • Startup: <$1M funding raised
  • Scale-up: >$1M funding raised
  • Scaler: >$100M funding raised
  • Super Scaler: >$1B funding raised

Somehow, the Super Scalers were the unicorn startups. For more details, you can check here.

Scale-up startups. Source: Tech Scaleup South Korea – Report 2020

MTB looked at the South Korean startup ecosystem from 2010 to 2019. The current phase, from 2017 to 2019, is the Scale-up stage.

As a result, the capital invested in Korean scaleups jumped to US$ 4.1 billion from the US$1.5 billion average from the prior three-year period. Furthermore, the number of scaleups has increased to over 110 new companies annually.

The tech scale-up ecosystem in South Korea is relatively young. 46% of the South Korean companies have been founded in the last five years. 86% of the majority are not older than ten years.

The difference is triple or quintuple times younger than comparable European startups.

South Korean Startup Ecosystem: UK, France, Germany, and Israel.

South Korean scale-ups raised nearly the same funding as the French Startup Ecosystem, accounting for about half of the French counterparts: 646 vs. 1176.

WORLD’S TECH SCALEUP ECOSYSTEMS: COMPARATIVE ANALYSISSource: Tech Scaleup South Korea – Report 2020

In terms of Scale-ups numbers, the South Korean startup ecosystem is closer to that of the German Startup ecosystem: 646 vs. 837.

However, the total funding raised amount in South Korean scale-ups was 34% lower than in Germany.

Scaleup ecosystems like Israel and the UK are much more significant. Those 646 scaleups, slightly less than one-third of those of Israel, attracted nearly half of the capital collected by their Middle Eastern counterparts.

The UK has produced 4.5 times more scaleups (2,880) to raise 3.3 times more money (US$ 56.3 billion).

The South Korean Startups’ Vertical: Which areas are hot?

67% of all the VC investments poured into the Korean scaleup ecosystem come from abroad. The most significant contributors are the US and Japanese investors.

US$4.5 billion (32%) comes from Japan, and US-based investors follow with 28% ($3.8B) of the total VC capital invested into the country.

China contributes 7% (roughly US$1 billion) of total investment, while another 2% (US$0.3 billion) of the capital comes from the rest of the world.

MTB mentioned in its report that the result is biased due to Coupang’s secured funding regarding the Japanese investors’ ratio.

No. of Scale-up startups with average funding amount per Startup.Source: Tech Scaleup South Korea – Report 2020 and Pickool team internal analysis.

The Gaming industry dominates the South Korean scaleup landscape: 61 companies raised US$ 3.5 billion (20.5%).

Peculiar is the E-Commerce industry that, with only 31 scaleups, first ranks in terms of capital raised (US$ 4.1 billion, 24% of the total).

This is mostly due to the presence of the e-commerce giant Coupang, which alone raised US$ 3.4 billion.

The report diagnosed the TIPS program as a reference case in South Korea for supporting early-stage startups for startup expansion.

The program provides R&D money without any strings attached in case a startup fails its efforts, making it easier for would-be entrepreneurs with innovative ideas to “shoot for the moon” and bring their ideas into the real world.

Another firm Startup GenoStartuprsed the South Korean Startup ecosstartups one of the top 30 Global Startup EcosStartupin the Startup GenoStartuprt.

For the detailed report from Mind the Bridge, you can download it from here.

Philip Lee profile image
by Philip Lee

Subscribe to The Pickool

Success! Now Check Your Email

To complete Subscribe, click the confirmation link in your inbox. If it doesn’t arrive within 3 minutes, check your spam folder.

Ok, Thanks

Read More