"This Year, 291 New Unicorn Companies Worldwide... Only 1 in Korea"

Analysis of Emission Status and Investment Ecosystem by Country

Data provided by the Federation of Korean Industries

[Asia Economy Reporter Kim Heung-soon] In the first half of this year, 291 new 'unicorn' companies?privately held startups valued at over $1 billion (approximately 1.117 trillion KRW)?emerged worldwide, but only one of these was a Korean company, according to an analysis. It was pointed out that an intermediate investment environment should be established to enable startups to sustain continuous growth, and conditions should be created to facilitate smooth recovery of investment funds.

The Federation of Korean Industries (FKI) announced on the 26th that it analyzed the production of unicorn companies by country and the status of the investment ecosystem using the international database of 'CB Insights,' a U.S. market research firm specializing in technology companies and startups, and arrived at these results.

US and China Account for 67% of Total
Korea Ranks 10th Globally by Number of Unicorns... Concentrated in Less Promising Sectors

According to the FKI, among the 291 companies newly designated as unicorns worldwide from January to July this year, U.S. companies accounted for 58.1% (169 companies), and Chinese companies accounted for 8.9% (26 companies). Among them, only one Korean company (Market Kurly) was listed.

Including newly entered companies this year, the total number of global unicorns was counted at 779. The top five countries by number of unicorns were the United States (388), China (157), India (36), the United Kingdom (31), and Israel (18). The U.S. and China together hold 70% of all unicorns. Korea ranked 10th globally with 1.4% (11 companies).

The top five unicorn industry sectors leading the future were fintech, internet software & services, e-commerce, artificial intelligence (AI), and health, with U.S. and Chinese companies occupying 62.8% (332 companies) of these sectors.

On the other hand, Korea had no companies in the AI and internet software & services sectors and was concentrated in relatively less promising sectors such as other industries.

Data provided by the Federation of Korean Industries

"To Produce More Unicorns, Expansion of Large-Scale and Late-Stage Investments Needed"

According to global investment status in startups from 2018 to 2020, the U.S. and China attracted more than 72.8% of the world's investment funds. Korea's share of investment attraction was only 1.5%.

Narrowing the scope to large-scale investments over $100 million, the U.S. and China attracted 79.6% of total investment funds, while Korea remained at 1.1%. In terms of investment stages, Korea has a relatively high proportion of early-stage investments compared to the world's top five, but the proportion of late-stage investments, which are essential for growth-stage startups to leap forward, is small, resulting in a lack of momentum.

Data provided by the Federation of Korean Industries

"Creating an M&A-Friendly Corporate Environment Needed to Revitalize the Investment Recovery Market"

Regarding 'exits,' where global investments in startups are recovered, major unicorn countries worldwide have mainly achieved exits through mergers and acquisitions (M&A), accounting for 82.8%. Korea's M&A exit ratio was 52.9%, indicating a relatively rigid investment recovery market.

Among Korean unicorn companies, Kakao, Woowa Brothers, Coupang, and Krafton have succeeded in exits so far, but Woowa Brothers experienced difficulties during the process due to domestic negative perceptions of global M&A.

Kim Bong-man, head of international cooperation at the FKI, argued, "To produce more unicorns in Korea, the scale of large-scale and late-stage investments must be expanded to provide momentum investments that enable growth-stage startups to leap into unicorns." He added, "M&A exits should be revitalized, and a virtuous cycle ecosystem of investment recovery and reinvestment must be established. To this end, deregulation of corporate venture capital (CVC) led by domestic large corporations is necessary so that their capital can be utilized for venture investments."

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