Last year, the number of domestic startup corporations was 622,750, down 4.3% (27,744) from a year earlier. However, startups in technology- and investment-linked sectors such as information and communications and finance and insurance increased on the back of the spread of AI.
The Ministry of SMEs and Startups on the 26th released the "2025 annual startup trends."
Fortunes diverged by industry. Finance and insurance rose 25.9% on the back of investment inflows. As Generative AI services spread into a range of areas including language and video, startups in information and communications that use them also rose 17.5%.
By contrast, electricity, gas, steam and air conditioning supply fell 29.2%. The impact came from Korea Electric Power Corporation (KEPCO) designating saturated-capacity-area substations in the second half of 2024 as grid management substations. A grid management substation is a facility that monitors, controls and operates the power system in real time, and output control for connected generation facilities can be carried out on a continuous basis. The industry says this measure led to a contraction in startups related to power generation projects.
Startups in accommodation and food service fell 11.8%. The downturn in the dining-out industry and intensifying competition in the cafe market played a role. Real estate also fell 9.1% due to sluggish construction and declining investment returns on commercial real estate.
By period, startups in January plunged 27% from a year earlier due to factors including the Lunar New Year holiday. As a result, total startups in the first half of 2025 fell 7.8% from a year earlier. However, in the second half, they inched up 0.2% on-year, a slight rebound driven by strong exports and measures to boost domestic demand.
Technology-based startups increased. Last year, technology-based startups numbered 221,063, up 2.9% (6,146) from a year earlier. Their share of all startups was 19.5%, up 1.3 percentage points from a year earlier. That is the highest level since the related statistics began.
By age group, startups decreased year over year across all ages. However, among those 60 and older, the rate of decline was smaller than in other age groups.