Although It's a Venture Investment Freeze, Startup Enthusiasm Remains 'Hot'

Despite the contraction in investment in startups, the enthusiasm for entrepreneurship remains undiminished. This is because, even though money is not circulating in the market right now and operations may be tough, the possibility of rapid growth is still considered real. The recent surge in new technologies, such as the ChatGPT craze, has also influenced the continued enthusiasm for startup creation. The competition rates for startup contests and various incubation programs where startups compete are as high as during boom periods.

On the 20th, the Asan Nanum Foundation announced that a total of 1,219 teams applied for this year's 'Chung Ju-yung Startup Competition,' which aims to discover prospective entrepreneurs and startups. Considering that 14 teams will be selected to advance to the business execution stage in this competition, the competition rate is 87 to 1. Last year, 873 teams applied for this competition, and 12 teams were selected, recording a competition rate of 73 to 1. Both the number of applicants and the competition have intensified compared to last year.

The Chung Ju-yung Startup Competition is a representative startup support program in Korea. It started in 2012 and is now in its 12th year. Over the years, it has become a cradle for promising startups, producing companies such as MyRealTrip, Classting, and Doodlin. Especially during the approximately six-month business execution stage, the Asan Nanum Foundation supports office space at the startup support center 'Maru' and provides dedicated mentoring from experts at leading domestic venture capital and accelerator firms, attracting many entrepreneurs every year.

Startup Support Center 'Maru180' operated by Asan Nanum Foundation

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The undiminished enthusiasm for entrepreneurship can also be seen in the results of the Small and Medium Business Corporation's Youth Startup Academy support. The Youth Startup Academy is a project that discovers excellent entrepreneurs with promising startup ideas and innovative technologies and supports all stages of startup development as a package. This year, a total of 3,291 people applied, recording a final competition rate of 3.59 to 1. Although this is slightly lower than last year's competition rate of 4.57 to 1, it indicates that the enthusiasm for startups continues this year as well. Regional areas are no exception. In the case of the Daejeon Youth Startup Academy operated by the private accelerator Bluepoint Partners, 121 teams applied to select 45 teams this year. Applications were accepted only from startups with business locations outside the metropolitan areas of Seoul, Gyeonggi-do, and Gangwon-do. Kim Yong-geon, Vice President of Bluepoint, explained, "Excellent startups can receive acceleration and grow not only in the metropolitan area but also in local regions."

This atmosphere is quite different from the recent decline in venture investment. Venture investment in the first quarter of this year was 881.5 billion KRW, down 60.3% compared to the same period last year. Despite this market contraction, entrepreneurs note that the funding sources have not completely dried up. In fact, although venture investment has decreased compared to the unusually high growth years of 2021 and 2022, it has actually increased compared to previous years. It rose by 13.2% compared to the first quarter of 2019 and by 14.0% compared to the first quarter of 2020. Additionally, the growth potential remains strong, as evidenced by the emergence of seven new unicorn companies?unlisted companies valued at over 1 trillion KRW?last year. A startup industry insider said, "Interest in entrepreneurship continues as startups demonstrating the capability to lead the transition to a digital economy emerge one after another," adding, "The recent focus on ChatGPT and other technological changes has also influenced this trend, with technology-based startups at the center of these changes."

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