Growing Korea's Startup Eco-system - Lim Jungwook, StartUp Alliance Korea, Seminar SEE MIKTA

startupall.kr │ contact@startupall.kr
Growing
Korea’s Startup Eco-system
Jungwook Lim

startupall.kr │ contact@startupall.krstartupall.kr │ contact@startupall.kr

Since 2013, Startup Alliance Korea has worked as active player in Korean startup
eco-system. We are the facilitator promoting entrepreneurship and connecting
startups and various stakeholders in the system.

Republic of Korea Overview

Right between China and Japan. 50M population.

Right between China and Japan. 50M population.
127M
1379M

11th largest economy
11th largest economy

Korea is home to many
successful IT companies

It is known for its fast internet infrastructure

First wave 1990+
Search/Portal, Gaming,
e-learning, e-commerce 
>$35B market cap
Software, Mobile, Internet,
Consumer Services 
>100$ market cap
source : Altos analysis
Second wave 2010+
There are many more internet companies
than one might imagine

Steady Growth of Venture Companies
In 1997, Act on Special Measures for the Promotion of Venture Business was passed

Total venture investment
3B venture fund
Raised last year
About 2B USD invested in 1,191 venture companies last year
(SMBA)

Recent
Challenges

Declining economic condition

Too much
dependency on chaebols

Samsung’s share of Korea GDP
26.6% (2013)

2017 profit projection 55B USD

Chaebol 財閥

They are old and
not aggressive enough

% of richest people who inherit its wealth from parents

Korea needs
new blood for growth

“Creative Economy”
Park Administration’s Policy Drive from 2013
創造經濟

"4th Industrial Revolution"
President Moon Jae-In
(In Office from May 2017)

Small Medium Business Agency upgraded to MSS!

5 Years ago…

Lack of
(early stage)
venture investment
Lack of
Startup community

Korea Venture Investment Corp
injected $2B into Korean VCs;
Giving Birth to 400+ New VC Funds
"Fund of funds"

KVIC was established in 2005
USD 1.7 Billion
KOSDAQ Crashed
Annual Trend of VC Investment Since 1998

However,
It is hard to get funded when
entrepreneurs start up for the first
time.

The government stepped in to
provide funding opportunities
for early stage startups

Matching Investment Fund by Government
The most successful public startup support program

Encourage the private
early stage venture investments
by providing matching funds

STARTUP
TIPS Partnering
VC or
ACCELERATOR
GOVERNMENT
100k investment
500k
R&D support
Paying back
up to 10%
Equity
1 to 5 Match!

STARTUP
TIPS Partnering
VC or
ACCELERATOR
GOVERNMENT
100k investment
500k
R&D support
Paying back
up to 10%
Equity
1 to 9 Match!
Up to
400k
marketing
support

TIP in Israel. (From 1991)

TIPS Program partnering with 40 VCs,
Accelerators and CVCs

Finding early stage
Global facing
Tech-driven
startups

Number of TIPS Startups
300+ and counting

120M+ has been
matched to 300+ teams
so far

Examples

Jobplanet
TIPS (2014.10)
+ Seed funding
$1.3M
Raised
$9M (2015.1)

DRAMA&COMPANY
Business Card App “Remember”
TIPs (2014. 5)
$1M
Raised
$2M (2014. 12)
$6.5M (2015. 9)

Lack of startup culture
or community

Gangnam
Huh, Startup?

Seoul
89%
Gyeonggi Province
6%
Busan
3%
Daejeon
1%
Daegu
1%
Gangnam-gu
77%
Gwanak-gu 2%
Gwangjin-gu 1%
Mapo-gu 2%
Seocho-gu 8%
Yeongdeungpo-gu 7%
Jongno-gu 2%
Jung-gu 2%
The location of Korean Venture Capital (117)

Why Gangnam?
• Home of many well known IT companies. (Samsung,
Coupang, Google Korea, Facebook Korea…)
• Formerly known as Teheran Valley.
• 80% of Korean VCs based in Gangnam.
• Convenient location to commute.

MARU180
D.CAMP
Gaepo
Digital Innovation Park
Google Campus Seoul
Startup Alliance
TIPS Town
D2 (Naver Accelerator)
Gangnam
station
Yeoksam
station
Seolleung
station
Samsung
station
Gangnam Startup Belt

March 
2013
March
2014
April
2014
April
2015
May
2015
D.CAMP STARTUP
ALLIANCE
MARU 180 GOOGLE
CAMPUS
SEOUL
NAVER D2
STARTUP
FACTORY
July
2015
TIPS 
TOWN

Event Venue, Co-working Space, Free Office Spaces
for Accelerators and Startups

CO-WORKING SPACE MAP 2017 IN GANGNAM AREA
Ver. 1
Last Updated on July 31, 2017

WeWork Seoul

Spark Plus

Z.A.G. POT

Cow and Dog

Government led
Startup hub

http://www.edaily.co.kr/news/NewsRead.edy?SCD=JC41&newsid=01262806609307584&DCD=A00304&OutLnkChk=Y
Center for Creative Economic Innovation (CCEI)

Startup Campus newly opened in Pangyo
March 2016

As a result…

Promising signs

Growing Number of Accelerators,
Incubators and Micro VCs
for Seed Funding

Accelerators, Micro VCs
(Early Stage + Seed Funding)

Neowiz
Founder
Inicis
Founder
Daum 
Co-Founder
Olaworks
Founder
NexR
Founder
Kakao
Founder
Prominent Entrepreneurs Turn into Angels & VCs
Byung Gyu
Chang
Douglas Guen Taekkyung
Lee
Junghee Ryu Jason Han Beomsoo Kim Jiwon Moon &
Changseong Ho
viki 
Founder

Byung Gyu Jang
Sold <First Snow>, his search engine startup to
Naver for 35M 10 years ago.
Established Bon Angels, funded 100+ startups so far.

Founder & engineering background

Established the ﬁrst startup accelerator in 2010.
Focused on supporting early-stage startups

Top talents to move to
the startup world

Frograms CEO & Founder, KAIST
Park, Taehoon
Coupang CEO & Founder, Harvard
From
Consulting
Firms
From Big
Companies
Choi Jaeho, Founder of Drama&Company
Kim Hosun, Founder of Sunshine Kim KyungTae, Founder of Zikto
Na Jewon, Founder of Yogiyo
(Top 4 Univ. for TIPS founders)
Kim, Bom

Foreign VCs becoming
active in Korea

$16.6M
NEW WORLD GROUP
$23M
KTB NETWORK,
GOODWATER CAPITAL,
ALTOS VENTURES
$65.95MFORMATION GROUP,
GOOD WATER CAPITAL,
PEJMAN MAR VENTURES
$120K
Y COMBINATOR
$4.5MALTOS VENTURES
SAMSUNG VENTURES
LB INVESTMENT
GS SHOP
$1.5M
DCM VENTURES,
STRONG VENTURES,
NAVER
2015~2016
Investments from overseas investors

The First Unicorn Startup was Born

Big corporations changes
their attitude toward
startups

Kakao acquired Kimgisa app, the Korean “Waze”
($56M, May 2015)

Innovative hardware startups spun off from
Samsung Electronics’ C-Lab, its own startup incubating program

Naver provides Npac, a cloud service, for free
for early stage startups

8 conditions for vibrant
startup eco-system
• A pro-entrepreneurship culture (Improving)
• Guidance from experienced entrepreneurs (Improving)
• A supportive regulatory environment (Improving…but)
• A collaborative business culture (?)
• Visible successes and role models (Improving)
• Risk tolerance (?)
• Availability of capital (Improving)
• Technical skills-computer programming (?)
Source : Crossroads

STARTUP 
ECOSYSTEM
STARTUP
ECOSYSTEM
Availability
of capital
Technical
Skills
Entrepreneurial
Culture
Experienced
Mentors
Regulatory
Environment
Collaborative
CultureVisible
Successes
Risk
Tolerance
8 conditions for vibrant startup eco-system
Source : Crossroads

Virtuous Circle
Begins!

2 years ago
The startup raised 1M+ funding
=80+

Things to ﬁx
for Korean startups

Things to fix
• Old regulations
• Unadventurous VCs
• Lagging entrepreneurial spirits - Fear of failure, Parents
• Too much dependency on gov funding
• Unfair business practice for startups
• Lack of exits (IPO or M&A)

Drone
Self driving cars
Ridesharing
Fintech
Sharing economy
Telemedicine…

Unadventurous VCs

B2B
Hardware
Autotech
VR/AR

Lagging entrepreneur spirits

Government jobs becoming extremely
attractive for the young generation.

Biggest hurdle
for young Korean
entrepreneurs?

Their parents

Startup? Are you crazy?

Get a job at Samsung

Too much dependency on
government funding

Startups
Chaebols
"They don’t treat us as equal business partner!"

Lack of exits(IPO or M&A)

My two cents for Serbia

For Serbian Startups
• Ease the regulations
• Make public support program for early stage startups
• Let entrepreneurs take advantage of global platform
• Matching funds for local VC, let them fund Series A stage
startups
• Connect with Silicon Valley eco-system
• Make the university as hub for startup eco-system

166M views in two month! (thanks to Youtube)

Sold 13M copy, 1.3M concurrent users play.
400M Revenue in six months

BG Chang, founder of Bluehole Studio
Appointed as a Committee Chairman of
4th Industrial Revolution

Nurture a
National startup hero

Serbian startup hero!

Korean in Silicon Valley Conference
Bring Korean Entrepreneurs and Professionals

Serbian in Silicon Valley!

Transform universities into
startup hubs

Make more local startup hubs

Activate local venture
investment

Let venture capitalists
Make a lot of money!

Attract top notch VCs
(foreign investors)

Building the National
Startup Brand

Global Expansion Support
Japan Boot Camp

Thank You

Growing Korea's Startup Eco-system - Lim Jungwook, StartUp Alliance Korea, Seminar SEE MIKTA

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