34 of the Top 100 Global Climate Tech Startups Unable to Operate in Korea

'2023 Startup Korea!' Policy Proposal Report Presentation

According to cumulative investment amounts, 34 out of the top 100 global climate tech startups would be unable to commercialize their businesses in Korea due to regulations. As the importance of climate tech and the role of startups in this field grows, there are calls for urgent changes in the domestic regulatory environment.

On the 1st, Asan Nanum Foundation, Startup Alliance, D.CAMP (Banking Sector Youth Startup Foundation), and Korea Startup Forum announced the '2023 Startup Korea!' report at the Yeouido 63 Convention Center. The report studied policy directions for fostering domestic climate tech startups and revitalizing the ecosystem.

Sangsangwon Moon, Executive Director at Samjong KPMG, is presenting the '2023 Startup Korea!' report to propose policies for fostering climate tech startups and revitalizing the ecosystem.

At the presentation, Sangwon Moon, Executive Director at Samjong KPMG, first shared key current status and issues of the domestic climate tech startup market. Moon said, "Climate tech accounts for only 4.9% of domestic startups. Even countries with similar average investment sizes per startup like India and Australia have over 10% of startups in climate tech, but we have less than 5%, and there are no unicorn companies."

Although climate tech innovation is necessary to achieve carbon neutrality by 2050, the growth of domestic startups leading this effort is slow.

Investment is also insufficient. Looking at climate tech investment scale, Korea showed a gap of more than 7.5 times compared to the top 10 countries as of 2022. Analyzing cumulative investment amounts from 2018 to 2022 and the average cumulative investment per climate tech startup, Korea recorded 4.5 billion KRW, which is over 3.8 times less than the top 10 countries' average of 17.1 billion KRW.

Moon explained, "Investors say this is because of high investment uncertainty. Overseas, uncertainty is reduced through policies supporting technology demonstration, but such support is lacking domestically, so the risk is judged to be high."

The most urgent issue is regulation. Among the top 100 global climate tech startups, 34 are currently unable to operate in Korea due to regulations. Another 26 startups can only operate conditionally under regulations. Only 40% can conduct business domestically without regulatory issues, meaning 60% face problems. Moon gave the example of the cultured meat sector, saying, "Domestic startups have world-class technology, but due to the lack of institutional foundations such as safety regulations and sales systems, business is impossible in Korea."

Accordingly, the '2023 Startup Korea!' report proposed three major measures to create an environment for activating and growing the climate tech startup ecosystem: ▲introducing incentives to expand demand and supply in the climate tech industry ▲designing policies to establish a specialized investment attraction base to reduce investment uncertainty for climate tech startups ▲changing the regulatory management, establishment, and improvement system related to climate tech.

Jang Seok-hwan, Chairman of Asan Nanum Foundation, said, "Following the announced measures for fostering and revitalizing the climate tech industry, I hope that practical government-level support and concrete policies will be promptly prepared, understanding the public good characteristics of the climate tech industry."

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