The South Korean startup industry has been thriving because of innovative ideas, enterprising founders and an amiable support system both through domestic and international ventures. From e-commerce, blockchain, artificial intelligence, virtual reality, FinTech to agricultural innovations, South Korean startups have dabbled in multiple areas successfully.
The startups are not only developing amazing technological inventions but are also progressing capital wise. Despite a slowdown in the system before two years, many startups have emerged as strong companies that have turned their investment to profitable returns.
The year 2018 has been a special year with few achieving ‘unicorn’ status by becoming a $ 1 billion company. The Top 3 Korean startups that have joined the ‘unicorn’ billionaire club regarding their market valuation and funds are:
1) Coupang – Valuation – $9 billion; Funds Received – $ 3.8 billion
Dubbed as the ‘Amazon’ of South Korea, Coupang is the fastest growing e-commerce startup. Founded in 2010, it is the largest online retailer selling products from electronics to food to over 120 million consumers. The startup is popular for its ‘Rocket Delivery’ that promises delivery in 24 hours and ‘Dawn Delivery’ service that offers mid-night orders delivered by morning at 7 am.
In 2018, Coupang received $2 billion in funds from SoftBank’s Vision Fund, which made the startup’s valuation at about $9 billion. SoftBank had made an initial investment of $1 billion in the startup in 2015. The other significant investors for Coupang have been Sequoia Capital, Founder Collective and Wellington Management.
Coupang’s CEO Bon Kim previously worked at the Boston Consulting Group. Before Coupang Kim had founded Vintage Media Company, which he sold in 2009. Kim had joined as a speaker at beGlOBAL SEOUL event in 2013, organized by beSUCCESS media group.
Coupang was named one of the “50 Smartest Companies in the World” by MIT Technology Review and “30 Global Game Changers” by Forbes.
2) Woowa Brothers – Valuation – $5 billion, Funds Received – $457.8 million
Woowa brothers operates the leading food delivery app in South Korea called ‘Baedal Minjok’. In December 2018, the startup achieved the ‘billionaire status with an investment worth US $320 million from the private equity firm Hillhouse Capital, US-based Sequoia Capital and GIC, Singapore’s sovereign wealth fund.
Founded in 2010, Woowa Brothers’ food delivery app is popular in South Korea where 7 out of 10 people order food via apps. Baedal Minjok’s monthly number of orders had reached over 20 million in July 2018, growing from 5 million in early 2015.
Woowa Brothers had several series of large investments, including 57 billion won or $50.7 million from the current investor Hillhouse Capital. In 2014, Goldman Sachs put in 40 billion won or $35.6 million in the firm.
KimBong-jin, CEO and Founder of Woowa Brothers attended beGlOBAL SEOUL 2015 as a prominent speaker sharing his experience with upcoming startups. The startup wants to develop delivery robots using artificial intelligence. It also plans to expand to other Asian countries and aims to open shop in Vietnam this year.
3) Viva Republica (Toss) – Valuation – $1.2 billion ; Funding Received – $248.10 million
The market of peer-to-peer money transactions has grown exponentially in South Korea and Viva Republica, a FinTech startup, has taken a substantial lead. The company manages the popular P2P mobile payment app ‘Toss’. The startup received $80 million in December 2018 from Silicon Valley-based venture capital firms Kleiner Perkins and Ribbit Capital. It received $40 million in June 2018 from Sequoia China and GIC Pte. The company was founded in 2011 by dentist Seunggun Lee and ‘Toss’ was launched in 2015. Seunggun Lee had attended beGlOBAL SEOUL event in 2012 in 20 startup battle and launched the startup’s first product Ulabla, a mobile-based social network service.
The app has grown to over 10 million registered users within three years. Toss now has about 20% of South Korea’s population as its users. The P2P app allows users to transact about $1822 per day. The startup claims to have reached a $18 billion transaction rate in 2018.
Toss is proving to be a much more beneficial and easier option for financial transactions as compared to the banking system, where security protocol is complex and the money transfer process is cumbersome.