Startups in Asia’s fourth-largest economy are seeking breakthroughs via overseas markets and AI.
Nearly half of South Korean startups hold negative views on the country’s startup ecosystem, citing the prolonged startup funding winter and the economic slowdown, according to Google Korea’s survey of the country’s 100 startup chief executives participating in Google Play ChangGoo.
Details of the survey
Of the 100 respondents, 42.7% answered they are negative about Korea’s current startup ecosystem – very negative with 8.7% and negative with 34%.
Those who presented positive views made up 24.3% – positive with 21.4% and very positive with 2.9% – while 33% answered neither positive nor negative.
The ongoing funding stagnation and the economic downturn are largely blamed for Korean startup founders’ dissatisfaction with the country’s startup scene, with 75.8% and 70.5% agreement, respectively.
Early stage startup funding has plummeted in South Korea as venture capitalists shifted to late-stage venture firms with stable business models amid the drought in venture capital funding, leading would-be startup builders to seek jobs at Big Tech companies.
According to Seoul-based startup and venture capitalist data provider The VC, combined startup funding stood at 497 cases – excluding post-IPO investment – in the first half of this year, down 32% from the same period last year.
In this environment, many Korean startups are actively seeking to go global and leverage artificial intelligence technology.
Of the total respondents of the survey, 37.9% have already ventured into foreign countries, and 52.4% are considering overseas expansion.
North America is the most popular destination for Korean startups, garnering 73.7% of the responses. Southeast Asia and Japan come in second and third with 66.7% and 62.6%, respectively.
Nearly 50% of the respondents have already adopted AI in the development of mobile apps and games, and 41.7% plan to apply AI to their businesses.
Despite the lingering funding difficulty, Korean startups are aggressive in hiring staff, especially AI experts amid the growing importance of AI technology.
Of all the survey respondents, 58.2% think the AI talent shortage is the most urgent issue, while 85.4% plan to hire staff within a year.
What is ChangGoo
ChangGoo is a Korean startup support program jointly launched by Google Play and Korea’s Ministry of SMEs and Startups in 2019.
The program is designed to give Korean startups in the mobile app and game development sectors various assistance, including funding, one-to-one consulting as well as mentoring and marketing support.
To help Korean startups advance into overseas markets, ChangGoo added Immersion Trip, a global fellowship program, in 2023.
Google Korea, the Korean operation of Google LLC conducted the survey Sept. 12-27.
