A survey found that investment in startups and small and medium-sized enterprises decreased by 19.7% last year compared to the previous year. Despite the investment contraction, the "AI startup investment boom" continued.

According to The VC, a venture investment platform, the disclosed investment amount for domestic startups and small and medium-sized enterprises last year was 6.0863 trillion won, a 19.7% decrease from 2023 (7.5815 trillion won). During the same period, the number of investments also fell from 1,838 to 1,336, a decrease of 27.3%.

/Courtesy of The V.C.
/Courtesy of The V.C.

By stage of investment, a clear downward trend in early-stage investment was evident. Last year, seed investments (initial investments right after startup) and Series A (beginning market penetration stage) amounted to 2.1845 trillion won, a decrease of approximately 25%. The number of investments was reported at 1,067, a drop of about 30%.

Both the number of investments and investment amounts showed a significant decline compared to the previous year, particularly in mid-stage rounds (Series B–C) and later rounds (Series C, D, etc.), which saw a decrease in the 10% range.

Due to the investment contraction, revenue has become an important factor in investment decisions, suggesting that investments are being directed toward startups that have already entered the market and achieved some results, rather than those that are just developing their business models.

Despite the downturn in the startup investment market, the "AI investment boom" continued. Last year, the investment amount for AI startups and small and medium-sized enterprises reached 966.6 billion won, an increase of 41% from the previous year (688.1 billion won).

In January last year, AI semiconductor startup "Rebellion" secured approximately 165 billion won in investment, while in April, AI startup "Upstage" received about 100 billion won. AI semiconductor startup "DeepX" attracted around 110 billion won in May, and AI video analysis startup "Twelve Labs" secured about 70 billion won in June.

Lee Gi-dae, head of the Startup Alliance Center, noted, "As AI technology advances and integrates into various industries, an AI supercycle has emerged," adding, "This is a global trend, and domestic venture capitalists (VCs) are also riding the AI supercycle."