This year, domestic venture capital (VC) firms continue their conservative investment approach. In January, 376.3 billion won was invested, marking a decrease of over 47% compared to a year ago, followed by another decline last month. Investments were concentrated only in K-beauty and biomedical corporations.
On the 5th, Mark & Company, which operates the startup analysis platform "Innovation Forest," reported that 73 startups attracted approximately 284.8 billion won in new investments last month. This represents a decrease of about 28% compared to 86 firms attracting 397 billion won in the same period last year.
This data aggregates new investments across all rounds, from seed stage investment to pre-IPO funding. Last month, the 145.3 billion won raised by the Hong Kong-based travel information platform operator Klook Travel Technology was excluded.
The venture investment market was also sluggish in January. A total of 102 corporations attracted 376.3 billion won in investments. This contrasts with January of last year when 115 startups, including generative AI startup 42Maru and travel platform MyRealTrip, attracted 712.3 billion won.
Earlier this year, many anticipated that the venture investment market would gradually recover. This optimism stemmed from the Bank of Korea's shift from a tightening to an easing monetary policy and the establishment of a large-scale venture fund worth 300 billion won by IMM Investment at the end of last year.
Market participants believe that political uncertainties, such as the impeachment climate, are impacting the contraction of the venture investment market. A lack of industrial dynamism is also cited as a reason for the decline in venture investments. There are complaints that aside from K-beauty and some biomedical startups, there are no viable investment options.
Last month, the entity that received the most investment was Healing Paper, which operates the beauty medical platform "Gangnam Unnie." Healing Paper secured an investment of 42.8 billion won last month from Korea Investment Partners, Shinhan Venture Investment, KT Investment, IMM Investment, and Kiwoom Investment.
The second-largest investment raised was by the biomedical corporation Revesmed, which manufactures medical devices. With plans for an IPO this year, the company attracted 27.0 billion won in pre-IPO funding from Korea Development Bank Capital, NH Investment & Securities, Susung Asset Investment, and Brain Asset Management.
Additionally, JLTS, focusing on robotic automation solutions, and At Home, popular for the electronic brand "Minix," secured new investments of 23.0 billion won and 18.0 billion won respectively from Stonebridge Ventures and Shinhan Venture Investment, making them prominent investment targets for domestic VCs last month.
In the VC industry, there are expectations that the venture investment market will improve in March compared to January and February. This is due to the Monetary Policy Committee of the Bank of Korea lowering the base interest rate to 2.75% per year during its second monetary policy direction meeting this year, along with some positive momentum in the public offering market.
A representative from the VC industry noted, "As interest rates fall, funds will inevitably flow into alternative investments rather than traditional asset investments, and this could naturally lead to revitalization in the venture investment market," adding that "substantial investments are expected from VCs who completed fund formations last year."