The startup ecosystem in South Korea has emerged to be one of the strongest in the Asian region. The Korean startups have experienced tremendous growth over the last decade owing to strong government support, access to the best venture capital sources from all over the world, and availability of top accelerators. Korean startups received a total investment of $3 billion in 2018. This demonstrates a significant jump of almost 43.9% from the $2.8 billion that the startups received in investments the previous year.
The latest investments have been largely directed towards the high tech startups that are related to the 4th industrial revolution. There are a total of 6 local startups that have gone on to achieve the unicorn status so far, an enviable number for a small country such as South Korea. A unicorn is a startup that is valued at over a billion dollars. Coupang, Viva Republica, Woowa Brothers, Yello Mobile, Bluehole and L&P Cosmetics have a valuation of over 23.5 billion dollars altogether.
Venture capitalists from all over the world have been attracted to this thriving startup ecosystem. These include large domestic financiers such as the SoftBank Ventures Korea, Altos Ventures and Samsung, as well as investors from the Silicon Valley ventures.
There are a number of reasons that draw investors from all over the world into the South Korean startup ecosystem. One of the major reasons is an established communication and information infrastructure in South Korea. South Korea has one of the highest internet and telecom coverage speeds anywhere on the globe. 95% of the country has LTE coverage. It also boasts the fastest average internet speeds and the greatest volume of broadband services per capita. Another reason is a highly tech-savvy population. The South Korean people are always looking forward to new technology and the adaptation rates to new technology are extremely high.
On the other hand, the government is very active in encouraging and supporting tech startups. As a result, the tech startup ecosystem is fairly well managed and easily attracts investments from both domestic and international investors. Global tech giants such as Facebook and Google have set up innovation labs and centers across the country while domestic giants such as Samsung and SK Telecom are more than willing to invest in the promising startup ecosystem at home.
Another reason why investors from abroad find the local startup landscape particularly appealing is South Korea’s location. It can effectively serve as a gateway into Asia for global firms looking to expand due to its geographical proximity and amiable ties with all its neighbors, such as China, Hong Kong, Japan, etc.