Domestic venture capital (VC) investment in startups turned to a decline last month. The warm breeze of optimism for a rebound in the venture investment market, which had spread thanks to a modest increase in June and three straight months of gains through Aug., also weakened. Fundraising in the AI and deep-tech sectors, which had continued to draw VC money, fell sharply last month.
According to the startup investment fundraising settlement of account compiled by ChosunBiz and Mark & Company on the 1st, about 380.4 billion won was invested last month in 81 startups. Compared with a year earlier, when about 699 billion won went into 105 startups, the number of startups that raised funding fell 22.9% and the amount dropped 45.5%.
Mark & Company is a domestic VC that operates InnoForest, a startup growth analysis platform, and it tallied new startup investments by domestic and overseas VCs and institutional investors from seed-stage fundraising to pre-IPO financing. Secondary transactions of existing shares between institutions were excluded from the tally.
Last month's venture investment also decreased from the previous month. In Aug., new investments of about 442.5 billion won were made in 97 startups. In particular, the tally showed that it was the first time in four months, since May, that new startup investments by VCs and institutional investors did not reach 400 billion won in a single month.
Lately, expectations for a recovery in the venture investment market have spread among startups. Backed by the new government's pledge to leap into the world's top four in startups and ventures, the investment volume, which in June rebounded slightly from a year earlier, rose for three straight months through Aug. In Jul., more than 860 billion won in new investments were made.
The slowdown in fundraising in deep-tech areas such as AI, which had led the recent recovery in venture investment, turned last month into an overall decline in venture investment. Last month, fundraising in AI and deep-tech, even including manufacturing and hardware, came to only about 48.4 billion won. That contrasts with the 146.6 billion won invested in AI and deep-tech the previous month.
New fundraising last month was led by bio and healthcare. With biotech stocks rising on the domestic stock market and results such as candidate substance out-licensing continuing, VCs were said to be taking the initiative to propose investments to biotechs that have proven their competitiveness through technology transfer.
In fact, 18 startups in bio and healthcare last month, including Neuracle Genetics, dr.blet Healthcare, God of Care, DRTECH, ReadyCure, LOGA, Motion Labs, Bayer, VSPharmTech, and Visual Terminology, raised 100.6 billion won in new investments. They ranked No. 1 in both total investment amount and number of companies that raised funds.
However, some say last month's decline in venture investment was a backlash to fundraising by Rebellions, an AI chip design startup. As Rebellions, dubbed a unicorn, moved to raise a total of 340 billion won in its series C, many AI and deep-tech startups postponed their fundraising schedules.
According to the investment industry, Rebellions announced late last month that it had raised 340 billion won in new funding. Its corporate value was estimated at 1.9 trillion won. If Rebellions' new fundraising is included in last month's startup investment fundraising settlement of account, last month's new investment volume rises to 720 billion won, up from a year earlier.
Meanwhile, KB Investment topped the list of VCs that made the most active investments last month. It invested in six startups, including Neuracle Genetics, LOGA, Bayer, CopsBio, Alchera, and Cross E&F. In addition, KB Investment was identified as an existing shareholder in Rebellions and also made a follow-on investment.