Startups Already Facing a Cold Wave

July Investment Amount Plummets 72%
Only 3 'Big Deals' Over 30 Billion Won

[Asia Economy Reporter Donghyun Choi] The domestic startup investment market has entered a deep freeze. The main causes of the market freeze are the increase in the U.S. benchmark interest rate and the prolonged Ukraine crisis, which have expanded economic uncertainty.

According to Startup Alliance on the 10th, the domestic startup investment amount in July was 836.8 billion KRW, a sharp decline of 72.7% compared to the same period last year (3.0659 trillion KRW). It also decreased by 38.8% compared to the previous month's investment amount (1.3691 trillion KRW). Compared to monthly investment amounts this year, it is the second lowest amount since May (823.8 billion KRW). Considering that 36.4% (300 billion KRW) of the total investment in July was raised by Viva Republica, the operator of Toss, the actual perceived decrease in investment in the market is expected to be even greater.

From last year, when the startup investment market was booming, until the first quarter of this year, it was not uncommon to hear news of startups that were not well known raising large-scale funds worth hundreds of billions of KRW. However, this atmosphere has now noticeably diminished. In fact, there were only three 'big deals' with investments exceeding 30 billion KRW last month. In July last year, there were 12 deals, and 15 deals last month.

A venture capital (VC) industry insider explained, "In the past, startup investments tended to be concentrated on platform businesses, but recently, it is difficult to receive investment unless the startup has solid technology and proven performance," adding, "The death valley for startups (3 to 5 years after founding) has become even harsher."

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