Domestic 'Unicorns' Now Number 20... Industry Says "Systems Must Be Established"

Number of Unicorn Companies, an Important Indicator Reflecting Startup and Venture Ecosystem... Need for Accurate Status Assessment

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[Asia Economy Reporter Kim Cheol-hyun] It has been identified that there are 20 companies in South Korea that meet the so-called 'unicorn' criteria, having surpassed a corporate valuation of 1 trillion KRW. Previously, the number of domestic unicorn companies was referenced using CB Insights, a global IT media outlet based in the U.S., but many companies were omitted from that list. Industry experts have emphasized the need to establish a system that can accurately grasp the status of unicorn companies in South Korea.

On the 20th, the Ministry of SMEs and Startups (Minister Park Young-sun, hereinafter referred to as the Ministry) announced the results of an investigation into companies that have actually achieved a corporate valuation exceeding 1 trillion KRW, based on domestic venture investment and media data. A total of 20 companies were listed. Until now, CB Insights had registered 12 domestic companies as unicorns, among which Woowa Brothers was removed after a merger announcement, and CJ Games was excluded post-merger. In addition, companies with a history of exceeding a 1 trillion KRW valuation were newly identified.

For example, although not listed on CB Insights, TMON is registered as a unicorn company on Crunchbase, and two companies that wish to remain private were evaluated to have surpassed a 1 trillion KRW valuation through domestic venture investments. Companies such as Kakao Games, which recently went public, as well as It’s Hanbul, DoubleU Games, and Pearl Abyss, were found to have exceeded a 1 trillion KRW valuation through domestic venture investments prior to their IPOs. Socar, which recently succeeded in raising about 60 billion KRW in investment, was also newly confirmed as a unicorn company with a valuation exceeding 1 trillion KRW.

The Ministry explained that this investigation was prompted by Socar being recognized as a unicorn company by investors, highlighting the need to accurately assess the current state of the domestic startup and venture ecosystem. The concept of a unicorn company, first coined by U.S. venture capitalist Aileen Lee in 2013, refers to an unlisted company that has achieved a corporate valuation of over 1 billion USD through an innovative business model. Recently, unicorn companies have been steadily emerging in major countries such as the U.S., China, and the U.K., and their status is recognized as an important indicator representing the startup and venture ecosystem. In South Korea, the performance of the startup and venture ecosystem has traditionally been announced using metrics such as the number of newly established corporations, startup survival rates, and venture investment amounts. Under the current administration, the number of domestic unicorn companies from CB Insights has begun to be utilized. However, the status of unicorn companies by country is also published by other global IT media such as Crunchbase, and the results differ by source. This has led to criticism that relying on a single media source makes it difficult to accurately grasp the status of unicorn companies.

The Ministry pointed out that there have been criticisms regarding difficulties in identifying unicorn companies that have surpassed a 1 trillion KRW valuation through investment but are not listed on CB Insights, or cases where valuation changes are not reflected because the valuation is based on the last investment round, or when companies do not wish to be listed. It was also noted that companies excluded after listing (IPO) or mergers and acquisitions (M&A) should still be accounted for. Park Yong-soon, Director of Venture Innovation Policy at the Ministry, stated, "The status of domestic unicorn companies is an important indicator to understand the scale-up status of South Korea’s startup and venture ecosystem. It is crucial to accurately grasp the status of domestic unicorn companies based on the objective criterion of a corporate valuation exceeding 1 trillion KRW."

The startup industry has also raised the need to accurately understand the domestic status, pointing out many omissions when citing overseas media. However, they emphasized that rather than just counting the number of unicorns, a system should be established where companies can report investment trends to the government. Jung Mina, Policy Director of the Korea Startup Forum, said, "The government should utilize investors and various sources well to accurately grasp the actual investment amounts. For example, when a company raises investment, there should be incentives to report to the Ministry of SMEs and Startups about the approximate corporate valuation and investment amount received. We need to move toward building such a system."

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