This article was published on Jan. 6, 2025, at 11:21 a.m. on the CHOSUNBIZ Money Move (MM) site.
Despite heightened political uncertainty due to the emergency martial law situation last December, the scale of new venture investments in the country exceeded 800 billion won. This level is more than three times compared to the period in 2016 when the impeachment of former President Park Geun-hye was being pursued (249.9 billion won).
According to results compiled by CHOSUNBIZ in collaboration with Mark & Company, a total of 143 corporations attracted over 832.7 billion won in new investments domestically last December. This reflects an increase of nearly 300 billion won compared to the previous month (November 2024, 553 billion won), indicating a clear improvement in investment sentiment.
A representative from a large house noted, "After hitting the bottom last year, it is expected that new investments will increase significantly from this year onward," adding that, "As more houses adopt a one-fund strategy to manage a large fund, the number of investment deals will increase even to exhaust dry powder."
Mark & Company is a domestic venture capital (VC) firm operating the startup growth analysis platform "Forest of Innovation." The aggregation of this new investment amount counted new investments over one month, ranging from Seed rounds to pre-initial public offerings (pre-IPO). Transactions between institutions were excluded from the statistics.
Earlier, there was a growing expectation within the venture industry that the venture investment market would recover in the latter half of the year as the Bank of Korea unexpectedly lowered the base interest rate to 3.25% per annum. A representative from the VC industry explained that, "With abundant liquidity flowing into the investment market as a result of the interest rate cut, the elevated valuations that had risen during the venture investment boom are gradually starting to decline, leading to signs of a rebound from the latter half of the year."
The industry is evaluating that it is somewhat emerging from the period of venture investment stagnation caused by economic downturn and high interest rates. In fact, according to the Korea Venture Capital Association, new investment amounts from January to November last year totaled 5.6411 trillion won, representing an 18.3% increase compared to the same period last year (4.7693 trillion won). This also exceeded the total new investment amount for the entire year of 2023 (5.3977 trillion won). The venture investment market, which peaked at 7.6802 trillion won in 2021, has successfully rebounded after experiencing a decline in 2022 and 2023.
In December of last year, warmth spread across various sectors including healthcare and bio (163.1 billion won), manufacturing and hardware (146.3 billion won), fashion (125 billion won), education (115.9 billion won), and telecommunications, security, and data (72.7 billion won). In terms of the number of deals, AI, deep tech, and blockchain accounted for 26, manufacturing and hardware for 24, and healthcare and bio for 21.
In particular, Speak Easy Labs Korea, which operates the AI-based English learning solution "Speak," and Abley Corporation, which runs the fashion platform "Abley," led the investment market by raising over 100 billion won each in new funding.
Speak Easy Labs Korea recorded a corporate value of 1.4 trillion won in its Series C round, attracting new investments amounting to 109.4 billion won. This investment, led by global venture capital firm Accel, included participation from the OpenAI Startup Fund, Khosla Ventures, and Y Combinator. Abley raised 100 billion won from China's Alibaba Group.
Global digital garment solution company Clover Virtual Fashion (50 billion won) and The Dream Entertainment, the webtoon studio of writer Park Tae-joon, who illustrated the webtoon "Appearance-Based Hierarchy" (21.5 billion won), also attracted interest in the fashion and cultural sectors. The AI semiconductor design fabless startup Hyper Excel and the autonomous driving parts company HJ Wave each raised 45 billion won.
However, there is a continued tendency to focus on stable late-stage investments, contrary to the intention of venture capital. According to last year's new investment status by the age of the firm, late-stage corporation investments (over 7 years) accounted for 45.2% of total investment rounds. This represents an increase of 7.4 percentage points compared to 37.8% in 2023. In contrast, the proportion of early-stage investments stood at 19.7%, the lowest level in the past 10 years.
A representative from a large VC stated, "Even if policy funds are received, matching with private funds is necessary, and private institutional investors prioritize a stable recovery track record. In such a challenging fundraising environment, the number of VCs participating in late rounds, which allow for faster exits rather than investing in early-stage corporations, is increasing," adding, "As the gap widens between the rich and the poor, the number of VCs with zero new investments is also rapidly increasing."