Frozen Investment Market... Startup Funding Halved Last Year

2023 Startup Total Investment
5 Trillion Won Scale... 52% Decrease Compared to Previous Year
Most Early-Stage Investments Under 1 Billion Won

Last year, the startup investment market froze, with the total investment amount falling to less than half compared to the previous year.

According to figures surveyed by Startup Alliance, a private support organization for the startup ecosystem, the total number of startup investments last year was 1,284, a 27.3% decrease from the previous year. This represents a drop of about 500 cases within one year.

Startup Investment Trends 2022-2023. (Source=Startup Alliance)

The investment amount was halved. Last year, the total startup investment amounted to 5.3388 trillion KRW. Compared to the 2022 investment performance (11.1404 trillion KRW), it decreased by 52.1%. This reflects the impact of the frozen startup investment market last year, which led to a significant reduction in large-scale investments. Investments under 1 billion KRW accounted for 63%, making up more than half of the total investments.

Looking at the top sectors by number of investment cases, they were ▲Healthcare ▲Manufacturing ▲Content & Social. As the investment winter continued, investments seemed to concentrate on healthcare and deep tech sectors with potential long-term value.

The top sectors by investment amount were ▲Finance & Insurance ▲Content & Social ▲Manufacturing. The finance & insurance sector attracted 733 billion KRW, content & social sector 645.8 billion KRW, and manufacturing sector 626.8 billion KRW in investments respectively.

In particular, last year, the AI boom led by OpenAI's ChatGPT brought attention to the artificial intelligence (AI) and semiconductor sectors. In the healthcare sector, AI precision medical service 'Imprimed' and brain disease AI imaging diagnostic solution 'Neurofit' raised 30 billion KRW and 20 billion KRW respectively.

In the manufacturing sector, 'MangoBoost,' which develops DPU (data processing unit) semiconductors, received 70 billion KRW, and 'SemiFive,' a customized semiconductor design solution, secured 68 billion KRW in investments. In the content sector, the video super-large AI company 'Twelve Labs' became the first Korean startup to attract investment from NVIDIA.

2023 Startup Investment Attraction Status. (Source=Startup Alliance)

Startup exits (investment recoveries) recorded 53 mergers and acquisitions (M&A) and 9 initial public offerings (IPO). Compared to 2022, M&A deals decreased from 126 to 53 (-57.94%).

Major M&A cases included entertainment company 'HYBE's acquisition of AI audio startup 'Supertone,' Kakao's Japanese subsidiary 'Kakao Piccoma's acquisition of content translation startup 'Voicero,' and Riiid, operator of 'Santa TOEIC,' acquiring English learning content operator 'Qualson.' Last year's notable IPOs were the space startup 'Contec' and semiconductor fabless startup 'Pado.'

A total of nine startups attracted large-scale investments exceeding 100 billion KRW. Major companies that secured big investments included Toss Bank, Musinsa, Beyond Music, Rebellion, Orchestra, Kurly, and District.

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