Domestic Platform Startups Face Sharp Decline in Large-Scale Investments

Startup Alliance Announces Platform Startup Investment Trends
Decline Since Mid-2022... Sharp Drop in Investments Over 10 Billion Won

Investment in domestic platform startups has been declining since mid-2022. In particular, large-scale investments exceeding 10 billion KRW have sharply decreased.

On the 22nd, Startup Alliance announced the investment trends of platform startups compiled since 2021. This survey analyzed investment trends of startups that received external investments from venture capital (VC), accelerators, corporate venture capital (CVC), financial institutions, and others, focusing on startups providing core platform services. Core platform services include online platform intermediary services, online search engines, online social networking services (SNS), and digital content services.

Investment in platform startups has been declining since mid-2022. Looking at the annual trend, there were 314 cases and 5.4925 trillion KRW in 2021, but in 2022, it decreased to 377 cases and 2.4117 trillion KRW. In 2023, there were 226 cases and 1.2486 trillion KRW, marking a reduction of over 4 trillion KRW compared to 2021.

In particular, the decline in investment amount was much more significant compared to the number of investment cases. Additionally, the proportion of platform investments in the overall investment market has steadily decreased. The share of platform investments, which accounted for 55.7% of total investment amount in the third quarter of 2021, fell to 8.9% by the fourth quarter of 2023.

Over the past three years in the platform investment market, the proportion of investments under 1 billion KRW and undisclosed investments has increased, but the share of investments exceeding 10 billion KRW significantly declined from 16.6% in 2021 to 14.6% in 2022 and 7.9% in 2023.

Startup Alliance explained that not only overall investment in platform startups but also large-scale investments exceeding 10 billion KRW have sharply decreased, making it difficult for platform startups to scale up. They also analyzed that the current domestic platform startups face challenges in attracting large-scale investments and achieving explosive growth due to the continued high-interest rate environment, intensified market competition, and significant regulatory uncertainties.

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