The startup culture is slowly starting to spread from its locus in the Silicon Valley. It’s even reached the CJK countries (China Japan Korea), which were locations infamous for their general disregard of startups as a legitimate source of business.
Below is a collection of excerpts that summarize this nascent trend in Korea:
That’s no longer a problem. So far this year, venture-capital investment in Korea’s tech industry has reached $198 million, more than four times that of 2012, according to the Asian Venture Capital Journal. That is a much more dramatic rate of growth than in the larger neighboring countries of Japan and China even though in value terms, it still lags Japan’s $370 million and China’s $3.3 billion.
4x growth, much of it government sponsored as seen by this next quote:
Through one program, called TIPS, or Tech Incubator Program for Startups, South Korea’s Small and Medium Business Administration magnifies startup investments made by venture capitalists whose firms have won designation as qualified investors. For example, if an investor makes a $10,000 investment, the government can pitch in with a five-fold grant of $50,000 — up to a maximum of $500,000.
These sorts of private/public investment combinations have led to a lot of competition for government grants.
Some learnings from the Korean Unicorn Club:
- Korea is good at software: Many have said that Korea is only good at hardware (think Samsung and LG). However, the data we have gathered shows that that is simply not the case. Koreans have proven they can make good software with great monetization.
- Gaming is clearly a Korean specialty: Four out of the 10 unicorns are gaming companies (Com2us, NC Soft, Nexon and Smile Gate)
Though this article muddles the line between a startup and the idea of an “established” company, it does neatly summarize the hot spots in the new Korean economy. Games are a big part of this: some of the more recent stars in this field are Fincon and 4:33, companies we will discuss in more detail in later post.
The interesting thing is that these game companies, of which there are rumored to be over 2000 with Korea, have been able to deliver strong performance without a clear strategy for the Western market. Instead, global strategy for Korean game companies focus mostly on South East Asia, China and Japan, as these markets have proven to be fertile fields for growth. Companies that do do well in the West, such as Com2us, have large regional branches located stateside that help smooth the cultural differences between Korea and the West.
Korean companies that don’t have the funds to create their own branch and still wish to reach out to the Western market are often left in a state of befuddlement. At Latis Global, we have expanded our services to include Western-facing global strategy, to not only help these companies reach the west but also to create a standardized, proven process for Western expansion. It’s still a work in progress, but we expect to create and share case studies in the near future. Stay tuned!