Investment in domestic startups and small and midsize enterprises fell 5.3% from a year earlier. While funding conditions improved in part, investment concentrated in a few deep-tech fields such as AI, semiconductors, and biotech, making it even harder for early-stage startups to raise capital.
According to "The VC," a startup capital market databases company, on Jan. 2, investment in domestic startups and small and midsize enterprises in 2025 totaled 1,155 deals, with 6.5724 trillion won invested. Compared with a year earlier, the number of deals plunged 30%, and the amount invested declined 5.3%. The survey was based on investment information provided by corporations and media reports compiled by The VC.
By round, early-stage investment contracted notably. Investment in early rounds from seed to Series A came to 847 deals and 1.919 trillion won. Year over year, the number of deals fell 40.4% and the amount invested dropped 29.2%. In contrast, mid-to-late-stage investment amounts increased from a year earlier, showing a divergent trend.
As expectations for a recovery in the IPO market grew, pre-IPO rounds increased sharply. Last year, pre-IPO deals rose to 56, up 33.3% from a year earlier, and the amount invested climbed 85.5% to 863.2 billion won. The Financial Services Commission saying it would expand the customized technology special listing system—previously limited to biotech—to core technology fields such as AI, the space industry, and energy is also seen as boosting expectations for the IPO market.
By industry, the tilt toward AI-centered investment was pronounced. Large-scale funding poured into AI Semiconductor corporations such as Rebellions and FuriosaAI, driving overall investment growth. As a result, AI's share of total venture investment expanded sharply from 9.4% in 2022 to 23.6% last year.
Globally, the share of AI investment is also rising rapidly. According to CB Insights, as of the cumulative third quarter last year, AI accounted for 51% of global venture investment, and in the U.S. market it expanded to as high as 85%.
Semiconductors and biotech remained strong, and investment also increased in startups in shopping and finance that actively target overseas markets. In contrast, content and gaming saw investment shrink sharply due to shifting preferences and profitability pressures, highlighting stark differences by sector.
A The VC official said, "Funding conditions improved in part on expectations for an end to global tightening, interest rate cuts, and expanded tax incentives for private venture fund-of-funds," adding, "However, as external uncertainties persisted, actual investment showed a pattern of 'mild easing, strong concentration,' focusing on a small number of verified corporations centered on deep tech such as AI, semiconductors, and biotech."