The startup scene in Korea started just a few years ago with the first batch of the accelerator Primer, launched in 2010 by the Founder of Daum, the 2nd largest web portal in South Korea. It has really taken off in the last couple of years with top accelerators like SparkLabs, KSTARTUP and FT Accelerator. The ecosystem is organised and mature, with 10 to 15 accelerators and more than 30 Korean investors, and the series A and the seed investors are investing actively.
The number of startups in South Korea soared to roughly 30,000 as of January 2015, up from a mere 2,000 some 16 years ago. And among that group, 63 have risen to No. 1 in terms of market share in their respective industries.
Korean young entrepreneurs finally start going beyond their risk-aversion and the traditional mindset associating success with working for one of the industry leaders.
They are encouraged by the government which wants to create a “creative economy”, one that favours and encourages young entrepreneurship. Currently, no country in the world has more backing per capita from the government than Korea. In the next 3 years alone, they’ll put $3.7 BILLION into startups in the form of grants and other initiatives.
South Korea has the 4th highest mobile penetration in the world (83%), and the highest credit card penetration (5 credit card per person on average), which gives endless opportunities for innovation and rapid adoption in sectors such as mobile commerce.
In April 2015, Google opened Campus Seoul where local entrepreneurs can go to learn, share ideas, and launch startups. That should galvanise the local startup culture.
Seoul also has a growing number of networking events that are connecting entrepreneurs with partners, investors, and more. Startup Weekend, Startup Alliance (an initiative to support Korean startups and assist their international expansion from the government and business leaders like Naver (Line) and Kakao Daum, the two largest internet giants in Korea) and beLAUNCH, the event of the tech media beSUCCESS, which we attended last year with 3,000 other people.
SOUTH KOREA
| GDP (in billions USD): | 1 |
| GDP per capita (in USD): | 25 |
| Population: | 50 |
| Population in 2050 (est.): | 51 |
| Internet Penetration: | 84.33% % |
| Mobile Penetration: | 83% % |
| Banking Penetration: | % |
| Credit Card Penetration: | % |
PROS
- The government’s backing
- The internet and mobile penetration (respectively 84 and 83%) are among the highest in the world. Korea’s technology infrastructure is years ahead of other developed markets.
- Korea’s population density : Seoul represents half of the entire county’s 50M population, which makes it easy for the masses to adopt and spread new technologies very quickly.
- The credit card penetration in South Korea is the highest in the world, with an average of 5 credit cards per person (compared to 2 in the US)!
- Korea is the World’s Mobile Commerce Powerhouse: Mobile commerce makes up 28% of total online sales.
- The present circle of young entrepreneurs, most of whom studied outside of Korea, are beginning businesses that have global ambitions.
CONS
- The lack of a startup culture.
- The Korean young population is quite risk averse. This is changing a bit as many students show more interest in entrepreneurship.
- Career paths are mostly dictated by the honour of joining the ranks of the industry’s largest organisations like Samsung, LG or Hyundai. It requires then even more courage and passion to run its own business.
- The lack of corporate culture that actively embraces M&A deals, which, in turn, rewards founders with attractive valuations.
- Still very few people in South Korea can confidently hold a conversation in English, even tough they learn English at school. Most entrepreneurs are the ones who studied outside of Korea.
TOP STARTUPS IN SOUTH KOREA
Memebox is a technology company that provides customers with the latest in Korean beauty products, culture, and trends. Founded in Seoul but now based in San Francisco.
Yello Mobile is a mobile business platform operating in shopping, media content, marketing & advertising, travel, and O2O business.
Baedal Minjeok is Seoul’s main local restaurant delivery app.
Coupang is an fastest growing e-commerce website in the world.
KnowRe is an online adaptive learning program for secondary mathematics. Now based in the US, it was born in 2008 out of a math academy in Seoul.
VCNC (Value Creators & Company) provides emotional communication methods to enrich real and offline-based relationships.
TOP PEOPLE TO KNOW IN SOUTH KOREA
James Jung
Founder and CEO of beSUCCESS
James is the CEO of the tech media platform beSUCCESS and organises the largest tech startup event in South Korea, beLAUNCH.
Tim Chae
Partner at 500 Startups
Partner of 500 Startups, Tim heads up the $15M micro-VC fund, 500 Kimchi, focused on Korean startups.
Jung-hee Ryu
Partner and CEO of FuturePlay, Mashup Angels and KonoLabs
nvesting partner at FuturePlay and Mashup Angels, and founder of its own AI startup KonoLabs
Jungwook Lim
Managing Director of Startup Alliance
Director of Startup Alliance, an initiative to support Korean startups and assist their international expansion. He has extensive human network in Silicon Valley and Korea & Japan Internet industry.
Co-founder and Partner of SparkLabs
He is Co-founder & General Partner at SparkLabs, one of the main startup accelerators in Korea and SparkLabs Global Ventures, a global seed-stage fund.
KJ Byeon
Founder and Managing Partner at Kstartup and AppCenter
Founder of one of the main accelerators KStartup, KJ is a tenured computer science professor at Ajou University with 20 years of R&D experiences. He founded two startups and the AppCenter, a non-profit organization to help application developers find startups through events like Startup Weekends and Super App Korea.