"Venture Investment Creates 4.2 New Jobs per 1 Billion KRW... 48,025 Jobs in 5 Years"

[Asia Economy Reporter Kim Daeseop] #. Yanolja, a leisure platform company, received a total investment of 37.3 billion KRW from venture capitalists (VCs) between 2015 and 2018, which led to job creation. The number of employees increased by 667, from 119 at the end of 2014, the year before the investment, to 786 at the end of 2019. Yanolja continued to grow and was listed as a unicorn company (a startup valued at over 1 trillion KRW and not publicly listed) in June 2019.

#. Fresh Easy Meal Kit, a home meal replacement (HMR) meal kit manufacturer established in 2016, successfully raised a total of 31.7 billion KRW from venture capitalists between 2018 and 2019. Through this, employment increased nearly 11-fold, from 27 employees at the end of 2017, the year before the investment, to 293 at the end of 2019.

Over the past five years, venture investments have significantly contributed to job creation in companies. Not only has there been quantitative growth in the scale of venture investments, but qualitative achievements such as job creation effects have also been realized.

According to the Ministry of SMEs and Startups on the 6th, employment in 3,339 companies that received investments from venture capitalists over the past five years increased by 59.4% (48,025 people), from 80,790 at the end of the year before investment to 128,815 at the end of 2019. The average number of employees per company rose from 24.2 to 38.6, indicating that each company hired an average of 14.4 new employees.

Additionally, the total amount invested in these companies by venture capitalists was 11.3956 trillion KRW, and it was calculated that 4.2 new employees were hired for every 1 billion KRW invested.

This analysis of job creation effects was conducted on 3,339 companies out of 4,613 that received investments between 2015 and 2019 and had employment information available from the Korea Employment Information Service. Employment at the end of the year before investment was compared with employment at the end of 2019.

The Ministry of SMEs and Startups has been analyzing the job creation effects of venture investments since 2018. This is the third analysis, and the effects have shown an increasing trend each year. New hires per 1 billion KRW invested increased from 3.8 in 2018, to 4.0 in 2019, and 4.2 in 2020. New hires per company also rose annually from 10.6 in 2018, to 12.4 in 2019, and 14.4 in 2020.

Looking at the annual job trends of 718 companies that received investments in 2015, employment per company increased from 29.5 to 38.5 in the first year after investment. The growth rate was highest at 30.5%. Thereafter, employment steadily increased by an average of 9% annually: 44.0 in the second year, 47.7 in the third year, 51.9 in the fourth year, and 54.4 in the fifth year.

By business age, startups within three years of establishment hired 5 new employees per 1 billion KRW invested. Companies aged between 3 and 7 years hired 4.0 new employees, and those older than 7 years hired 3.3 new employees per 1 billion KRW invested.

In particular, among the Fourth Industrial Revolution sectors, companies in the 'Cloud' field hired 8.7 new employees per 1 billion KRW invested. This was followed by 'Intelligent Semiconductors' (8.6) and 'Blockchain' (7.6). By industry, companies in the 'Game' sector hired the most, with 5.8 new employees per 1 billion KRW invested. Next were 'Information and Communication Technology Services' (5.3) and 'Video, Performance, and Music' (5.2). Overall, service-related industries showed excellent job creation effects.

According to the Ministry of SMEs and Startups, the scale of venture investments by year was 2.3803 trillion KRW in 2017, 3.4249 trillion KRW in 2018, and 4.2777 trillion KRW in 2019, increasing every year.

Park Young-sun, Minister of SMEs and Startups, said, "Summarizing the results of this analysis, venture investments have not only grown quantitatively but also greatly contributed to job creation, showing qualitative achievements as well. This year, we will supply 1.3 trillion KRW from the Korea Fund of Funds to the investment market, and we will accelerate the preparation of subordinate legislation for the Venture Investment Promotion Act scheduled to be implemented in August, as well as the K-Unicorn Project, to maintain the momentum of venture investment."

This content was produced with the assistance of AI translation services.