Bio·Health Rises as a Major Sector... Startup Landscape Shifts

4th Batch Baby Unicorns Mostly in Bio·Health
First Time Industry 1st Since Baby Unicorn Project
'Second Semiconductor' Focused Nurturing Policy Is the Trend

Bio and health, known as the "second semiconductor," are emerging as the leaders among domestic startups. On the 30th, the Ministry of SMEs and Startups announced that among the 51 companies selected for the 4th batch of "Baby Unicorns," the bio and health sector (22 companies) outnumbered the ICT and DNA-based platform sector (19 companies). The Baby Unicorn program nurtures "pre-unicorns" with a corporate value of around 100 billion KRW, providing a total of 17.3 billion KRW in support, including 300 million KRW in direct support and 17 billion KRW in indirect support to selected companies.

Since the launch of the 1st Baby Unicorn program in 2021, this is the first time the bio and health sector has had the largest share. Until the 3rd batch, ICT (Information and Communication Technology) and DNA-based platform companies consistently held the top spot. In the startup ecosystem, where funding has nearly dried up, bio and health is one of the sectors performing well. In line with this trend, the government is pouring out support policies for related industries.

A ‘Leader’ with Scars, but Still...

NK cell therapy developer Ingenium Therapeutics, a Stage 4 Baby Unicorn (Source: Ingenium Therapeutics Homepage)

At the time of the 1st Baby Unicorn selection, ICT and DNA-based platform companies accounted for 50%. This proportion steadily declined to 45% in the 2nd batch, 43.9% in the 3rd, and 37.3% in the 4th. Conversely, the share of bio and health was only 25% in the 1st batch but gradually increased to 26.7% in the 2nd, 36.5% in the 3rd, and surged to 43.1% this time, creating a "golden cross."

Bio and health overwhelmingly pass the initial "hurdle." To apply for Baby Unicorn status, a company must have secured at least 2 billion KRW in investment. In today's market, where funding is nearly dried up, bio and health is one of the few sectors still receiving investments. According to the "April 2023 Investment Report" by the public-private joint network Startup Alliance, the total investment amount dropped 78% compared to the same period last year, totaling 263.9 billion KRW. By sector, bio and health received the highest investment at 67.6 billion KRW.

One year ago, in April 2022, the home and pet sector led in investment amounts by industry. Moreover, various sectors including ICT alternated in taking the monthly top spot, with bio and health mostly ranking 2nd or 3rd. An industry insider said, "Although bio and health have also been hit in the overall frozen market, they are performing better than other sectors," adding, "The nature of the industry, which does not rush immediate results, works as an advantage."

The Bio and Health ‘Trend’ Continues

Minister Lee Young of the Ministry of SMEs and Startups (fifth from the left) is attending the "Breaking Bio Venture and Startup Regulations" event at Korea Biopark in Pangyo, Gyeonggi-do on the 30th and posing for a commemorative photo. (Photo by Ministry of SMEs and Startups)

The bio and health trend is expected to continue. Among the 34 newly selected operators of the TIPS program, led by the Ministry of SMEs and Startups in the second half of last year, 22 (64.7%) specialized in bio or healthcare. TIPS is a government-led private investment-driven technology startup support program. Although not intended by the government, the market has long recognized bio and health as the leaders of startups.

The government is pouring out support policies for bio and health startups. President Yoon Suk-yeol referred to bio and health as the "second semiconductor" in February. During his state visit to the U.S. in April, he also visited the Boston cluster, a "holy land" of the bio and health industry. At the cluster event hosted by the Ministry of SMEs and Startups, four MOUs (Memorandums of Understanding) were signed, including workforce training agreements between Moderna and KAIST. On the 30th, the Ministry of SMEs and Startups held a "Breaking Down Regulations for Bio Ventures and Startups" meeting, stating, "We will remove all obstacles that hinder growth."

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