A three-month streak of favorable conditions has begun in the venture investment market, which had been frozen. Following June and July, the scale of investments by venture capitalists (VCs) in startups increased compared to a year ago. In particular, the number of institutional investors, including VCs who executed investments more than three times last month, exceeded 10.
According to the 'settlement of account' released by InnoForest, a startup analysis platform, there was approximately 442.5 billion won in new investments made in 97 startups last month. This is a 7.4% increase in monetary terms compared to approximately 412 billion won invested in 79 startups in August of last year.
The 'settlement of account' for startup fundraising conducted by VC Mark & Company, which operates InnoForest, has recorded new investments from domestic and foreign VCs and institutional investors in startups from seed stage investments to pre-initial public offering (pre-IPO) stage, marking an increase for the third consecutive month since June.
The venture investment market had been shrinking until May of this year. Observations suggested that the venture investment market had entered an ice age after experiencing a cold spell, due to the combination of an economic downturn that limited investments and challenges in recapturing invested funds due to rising listing thresholds. However, it has recently rebounded.
Industry assessments indicate that favorable conditions have begun for the venture investment market, which underwent stagnation after interest rate hikes in 2022. In particular, as startups' valuations were adjusted downward during this stagnation, a mood is forming where VCs are resuming investments.
In fact, last month, the number of VCs that executed new investments more than three times included 11 firms such as Hanwha Ventures, Company K Partners, Smilegate Investment, Shinhan Venture Investment, Lotte Ventures, IBK Venture Investment, Stick Ventures, Future Play, and Series Ventures. 500 Global invested in five companies.
The Lee Jae-myung administration, which took office in June, aiming to turn Korea into a leading country in entrepreneurship and venture capital, has also influenced the investment actions of VCs. Next year, the Ministry of Small and Medium-sized Enterprises and Startups plans to allocate a historical high of 1.1 trillion won for the fund of funds, increasing the need for new fund establishment.
In terms of sectors, large investments were concentrated in deep tech areas such as AI and blockchain. Both the number of corporations raising funds and the investment amounts recorded first place. In particular, 'Upstage,' an AI company developing large language models (LLMs), received a total of 62 billion won in investments from Industrial Bank of Korea, Intervest, KB Securities, and Primer Sazze.
In addition, AI startups such as 'Friendly AI' (27.5 billion won) and 'Select Star' (20.5 billion won) secured new investments, further proving investors' interest in deep tech. 'Modhouse,' which operates the blockchain-based entertainment platform 'Cosmo,' also attracted 21 billion won in investments.
Mark & Company, which operates InnoForest, noted, "Last month, fields such as AI and blockchain in deep tech showed overwhelming presence as a single category," adding, "As structural changes align with the acceleration of digital transformation across industries, the scale of investments in the deep tech sector is expected to continue to grow."