The South Korean startup ecosystem has flourished over the past decade, attracting major tech firms and venture capital from the West. With a strong economy and support from Big Tech companies, like Google, Meta, Qualcomm, and Samsung, South Korean startups have enjoyed good access to funding. The Korean government has also played a role in fostering innovation by establishing innovation hubs, incubators, and accelerators. As a result, South Korea now ranks ninth on the list of countries with the highest number of unicorns, with its capital city, Seoul, being a top destination for building tech startups.
However, like startups worldwide, South Korean startups have faced challenges due to the economic downturn. The market turned in early 2022, leading to diminished funding opportunities, lower valuations, and difficulties in securing growth-stage funding. In 2023, venture capital investments in South Korea dropped to around $4 billion from $5.1 billion the previous year.
Despite these challenges, 2024 is expected to be a pivotal year for many South Korean startups. Several prominent startups are preparing to go public, either domestically or in the U.S. These startups have gained significant traction and are poised for further growth. Here’s a list of the top startups to watch:
1. Yanolja: Yanolja is a travel booking platform that has disrupted the concept of love hotels in Korea. It has transformed them into attractive short-term rental options for hip young people and travelers. The startup joined the unicorn club in 2019 and has since raised significant funding from investors like SoftBank Vision Fund and Booking. Yanolja is preparing to raise $400 million in its initial public offering in the U.S.
2. Viva Republica (Toss): Viva Republica is the company behind Toss, a finance super app that simplifies online payments in South Korea. The startup became a unicorn in 2018 and has raised substantial funding from investors like PayPal and Sequoia China. Viva Republica is likely to reach profitability this year and is planning to go public in South Korea.
3. Kurly: Kurly is a grocery delivery service that has experienced significant growth during the pandemic. The startup had planned to go public in the U.S. in 2021 but postponed its IPO due to market conditions. Kurly recorded its first profitable month in December 2023 and is now considering resuming its listing plan.
4. Dunamu: Dunamu is the operator of Upbit, South Korea’s largest cryptocurrency exchange. The startup briefly reached a valuation of $17 billion in 2022 but saw its value plummet as the hype around crypto faded. However, Dunamu saw an uptick in profit in 2023 and is reportedly aiming to go public on the Nasdaq.
5. Musinsa: Musinsa is a fashion marketplace that offers a wide range of local and foreign fashion brands. The startup has gained popularity and significant revenue, with its annual GMV crossing $2.35 billion in 2022. Musinsa is reportedly in talks with investment banks to run its initial public offering in South Korea.
6. Danggeun Market: Danggeun Market operates Karrot, a hyperlocal marketplace app for owned goods. The platform has expanded its operations globally and raised substantial funding. Danggeun Market posted its first profit in 2023 and is expected to go public once it strengthens its financial base.
7. Bucketplace (O!House): Bucketplace offers a home decorating and interior app called OHouse. The startup provides various services related to the residential space, including home improvement, furniture delivery, and moving services. Bucketplace raised significant funding in 2022 and turned down an investment from Alibaba. The startup’s business model is similar to Houzz and is preparing for an IPO.
8. Moloco: Moloco is an adtech startup that uses machine learning to build mobile campaigns for app developers. The startup has raised substantial funding and intends to pursue a public listing on the Nasdaq.
9. ZigBang: ZigBang is a proptech startup that raised funding in 2022 to enter the smart home industry. The real estate platform has faced challenges due to the state of the real estate market in South Korea. However, it is expected to go public in the future.
10. Korea Credit Data: Korea Credit Data offers services for small- and medium-sized enterprises (SMEs) in Korea. The fintech startup provides a bookkeeping app called Cashnote to help SME owners track their cashflow. Korea Credit Data raised significant funding in 2023 and is planning to go public in 2025.
Overall, South Korea’s startup ecosystem has seen significant growth and success in recent years. Despite the challenges posed by the economic downturn, these top startups are well-positioned for future success and are preparing to go public to further fuel their growth. Investors and tech enthusiasts should keep an eye on these startups as they continue to shape South Korea’s vibrant startup ecosystem.
