On December 11, the Ministry of SMEs and Startups (MSS) and Korea Technology Finance Corporation (KOTEC) selected 14 companies as preliminary unicorn companies to carry out the guarantee of 77.5 billion won or about $66.5 million in funds for the second half of this year.
The 14 selected companies include Rainist, Riiid, My Real Trip, Barogo, SmartStudy, StyleShare, Agencomm, NGeneBio, OTD Corporation, Wanted, Wedding Book, ETS, J2H Biotech, and P&H Tech.
The special guarantee is based on the popular opinion that “the preliminary unicorn companies, despite their verified business models and remarkable growth, often face challenges in procuring funds due to rapid expansion and rise in debt.” The program was first launched in April of this year to give financial scale-up support (up to 10 billion won) to companies in securing their growth momentum.
Similar to the first half of the year, a common aspect of all these selected companies is that they outperformed most other companies in terms of sales growth, job creation, and investment scale.
Furthermore, most of these companies, who have invested a significant amount for future growth, are facing a challenge in procuring funds from commercial banks due to high operating losses.
In detail, these companies can be categorized into majorly information technology (seven IT companies) and manufacturing industries (three bio-related companies, and three material and component equipment companies). By industry, these companies can be subdivided into platform service providers (six companies) – which are the majority, content providers (two companies), and a FinTech company (one company).
An official from KOTEC stated, “After conducting the second round, we discovered that the market for the preliminary unicorn special guarantee business very popular, shown by an increase in competition.” He added that “the government will convert this support program into an official support program to help startups grow into unicorns. ”
Meanwhile, the 13 preliminary unicorns selected in the first half of this year are NeoLab Convergence, Dalcom Soft, DS Global, Ridi Corporation, MyMusicTaste, Mesh Korea, Blank Corporation, Wadiz, WATCHA, Kurly, PPB Studios, Hana Technology, and Healcerion. Ten of these companies are in the red, but the average investment raised is 29.3 billion won or about $25.1 million which is 12 times the market average. Their sales growth increased 6.3 times over the past three years.