Edited by John Yoon, founder and editor-in-chief at Seoulz
The Korean startup ecosystem has been on the rise ever since major global companies started to support startups in Korea. Google launched its first Asian Campus in Seoul in 2015. Facebook opened its Innovation Lab in Pangyo Techno Valley. Korean conglomerates soon followed suit, with Samsung creating Samsung C-Lab to nurture early-stage startups. The Korea government continues to invest in the startup ecosystem and has plans to invest USD 12 billion over the next 4 years. South Korea is the perfect place for tech startups to launch their product or service. Korea is considered one of the most connected countries in the world. In addition to having one of the fastest internet connections in the world, smartphone penetration sits at 95%.
Koreans are also very tech-savvy and are early adopters of new and innovative technologies. This is one of the main reasons why Koreans embraced blockchain technology and cryptocurrencies so quickly. While the blockchain hype has died down, Korea is still a leader in the fintech space, with successful startups like Viva Republica. Additionally, the Korean fashion and beauty industry is stronger than ever. Lastly, South Korea’s strong cultural and economic ties to China, Southeast Asia, and Japan make Korea the perfect place for global startups looking to enter the Asian market.
Ecosystem Summary
Differentiators
- The Korean government invests on average USD 2 billion a year on startups
- Korea is a key Asian hub for specific industries, such as gaming, fashion and beauty, music, and blockchain
Challenges
- Korean startups focus heavily on the domestic market and have issues scaling globally
Country Outlook
The outlook for the Korean startup ecosystem looks strong as more and more Korean startups are eager to partner with global companies. This is a change from their domestic-focused mentality. The Korean government has played their role in bringing in global companies to interact with the Korean startups. Korean culture is hotter than ever thanks mainly to the success of the boy band BTS and other K-pop stars. BTS has been massively successful in bringing Korean music and culture, known as the “Korean Wave,” to the US in 2019. The Korean Wave content business has generated over USD 3 billion abroad in 2019.
Other industry sectors with great potential are gaming, beauty, healthtech, AI, and blockchain. The Korean government has put restrictions on ICO projects in Korea, however, they have embraced blockchain technologies. Regulations will play a huge role in what happens to the blockchain ecosystem in Korea moving forward. Even with globalization, Korean startups still have issues going global. The main issue is that since Korea’s market size is around USD 750 billion (15th in the world), many Korean startups feel there is no need to expand into other markets. There is therefore a risk of Korean startups being overtaken by global companies coming into Korea if local startups do not start expanding outside of Korea.
Promising Startups to Look Out For
Translation | Seoul
BabelTop.net is a translator matching platform—it’s a translation and localization startup in Seoul. They’ve built a solution for the translator community to provide customer translation needs.
Marketplace | Seoul
Cardoc was founded in 2013 as a provider of mobile estimation services for car repairs. It’s an app, with functionality to find repair quotes, purchase car supplies, make reservations at car maintenance centers, and use an interactive search function to find the cheapest gas stations.
Fashiontech | Seoul
Codibook is a fashion platform aimed to deliver the best shopping experience; the platform shows a variety of styles and latest trending items. From fashion tips, trending styles, and look books, users can shop and coordinate outfits at the same time.
Internet-of-Things | Seoul
Dot is the creator of Dot Watch, a smart braille watch. Over 400 million people around the world can’t read a watch face. Dot Watch uses braille by having their “Dots” rise and fall to spell out braille words four characters at a time. Furthermore, it gives real-time updates from whatever device it is connected to.
Interested in learning more about this startup ecosystem?
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Disclaimer: all content within this Startup Ecosystem Summary is written by and reflects the personal perspective of the guest editor.