46% of Korean Startups Expanding Overseas Say "Going Abroad to Launch Global Services"

[Asia Economy Reporter Jeong Hyunjin] The place where Korean startups have expanded the most is Silicon Valley in the United States, and about half of the startups that have entered overseas markets were founded with the goal of launching services developed specifically for those markets.

On the 24th, KOTRA announced that the results came from a survey conducted over a month from December 6 last year to the 5th of this year, through overseas trade offices worldwide, investigating the status of 198 Korean startups located in 29 countries. According to the survey results, one out of four startups expanding overseas entered North America, and among them, 60% chose Silicon Valley. The proportion of startups entering North America was 48.1% in 2020 but decreased to 40.4% last year. Following this, China accounted for 20.2%, Southeast Asia 15.2%, and Europe 11.1%.

Among the startups expanding overseas, 49.5% had their headquarters located abroad. In terms of items, intangible services, applications (apps), and solutions accounted for 63% of the total, the largest share, while items combining tangible products and services made up 21% of the total.

The main purpose for startups to establish overseas was "to target overseas markets with services suitable for those markets," accounting for 45.5%, the highest proportion. Next, 38.9% responded that they expanded overseas "to increase consumers and customer base," ranking second, while "because it is easier to attract overseas investment" and "to cooperate with overseas partners" each accounted for 4.5%.

Among startups expanding overseas, early-stage startups at Series A or below accounted for 74% of the total, indicating very active overseas expansion by early-stage startups. Companies with 10 or fewer employees made up 69% of the total, well over half. In terms of sales performance, companies with annual sales of less than $10,000 (about 12 million KRW) accounted for 29%, and those with over $1 million accounted for 28%.

Regarding preparation for overseas expansion, 66% of the responding companies took 1 to 2 years, the largest share, while 20% said it took more than 3 years.

Kim Yuntae, head of KOTRA's Small and Medium Enterprise Division, said, "Overseas expansion is very important for startups to grow," adding, "We will actively support startups to grow in overseas markets through various business opportunities."

Meanwhile, KOTRA plans to discover more than 200 open innovation demands from global companies for startups to conduct technology demonstrations overseas this year and connect them with startups. It will also support startups in winning prestigious awards such as the CES2023 Innovation Award and the Edison Awards to build credible references. In addition, KOTRA will hold various events connecting overseas partners and domestic startups’ businesses, including Global Jump 300, Innogate 2022, and Sovereign Fund Meetups.

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