The Korean Startup Ecosystem in 2021 is looking to recover from the impact of COVID-19. The South Korean government has done a great job of flattening the curve of COVID-19 by harnessing technology. It may surprise some to know that the economy of South Korea is now the 4th largest in all of Asia. They have one of the best wireless infrastructures, yet Korea is still globally not recognized as a startup tech hub. This is because their rise from being one of the poorest countries in the world to a highly developed country in just 60 years is not commonly known. South Korea’s success proves that good economic management is far more important than natural resource wealth in determining the success of a nation. 

South Korea still remains a mystery. This is because South Korea is only 1 of 3 countries (Russia & China) in the world where Google is not the primary search engine. Therefore the world does not have access to information related to South Korea since most of the content is on Naver, a search engine that is not used outside of Korea. However, despite this, South Korea continues to be one of the fastest-growing developed countries in the world.

Korean Startup Ecosystem

Korea History

Post-Korean War

After the Korean War, South Korea and North Korea were dirt poor. In fact, many don’t know that North Korea was in better shape than South Korea after the Korean War. North Korea controlled most of the industrial infrastructure while South Korea mainly relied on agriculture. North Korea had great support from Russia and China, while South Korea didn’t get much support from their ally, the United States. A third of the South Korean population was homeless, and the government depended on the little help the United States provided. However, North Korea has struggled to advance since the war, while South Korea has been an economic powerhouse. How on earth did this happen?

Things started to turn around for South Korea in the mid-1960s. During the Vietnam War, the United States and South Korea fought together. South Korea contributed over 300,000 men to the war in Vietnam. In return, the United States gave South Korea foreign aid. This meant that South Korea had the cash flow it needed to build the infrastructure it needed to transform its country. Most of the foreign aid went into modernization efforts and the creation of schools. 

President Park Chung-hee’s Plan

The man most responsible for South Korea’s success is President Park Chung-hee. His plan for South Korea was to have the Korean government give full support to the top leading Korean companies and help fund them through government loans. Therefore many of these companies were able to get loans at low-interest rates. The Korean government tended to give massive tax breaks to these Korean companies which allowed them to compete with the rest of the world. These Korean companies like Samsung and Hyundai were able to put the massive Korean population to work and work they did. In addition, focused on creating modern technology on the level that it could compete in emerging global markets. Therefore global competitors had a hard time competing with South Korea’s massive educated workforce. 

Government Corruption 

While the Korean government’s support for large corporations has gotten South Korea to where it is now, it doesn’t come without some negatives. While Korean companies were now able to compete with their global competitors, not all succeeded. However, those that did succeed, like Lotte, Samsung, and LG are now giant and efficient corporations. They were not only succeeding in South Korea but also in the global market. South Korea also moved into very capital-intensive industries like ship manufacturing. Today, South Korea is the largest shipbuilder in the world, the 3rd largest car manufacturer, and one of the leaders in IT. South Korea’s GDP at the end of 2019 was $1.69 trillion, which is bigger than Australia’s. 

The Conglomerates of South Korea – The Chaebols 

The power of these corporations is still very present today. These are family-run mega-corporations such as Hyundai, Samsung, and LG. Hyundai dominates the automotive/shipping industry, while Samsung and LG dominate the consumer electronics sector. These three companies alone are ultimately responsible for 66% of the Korean economy. Therefore many Koreans look to these companies for employment. This is why many young Koreans dream of working for one of these corporations. Therefore there was no real culture of entrepreneurship in Korea. For a young person with talent, their choices were to become a doctor, lawyer, government worker, or work for these major corporations like Samsung. Not until recently has entrepreneurship been a real option for some of the top talents in South Korea.  

Korean Startup Ecosystem

The Korean startup ecosystem did not exist just 20 years ago. The Korean government was trying to grow and find new ways to create jobs in the economy. They started to realize that entrepreneurship was the key to job creation. It was the main factor in a strong and innovative economy. When you look at the Korean startup scene today, the community is strong and growing. Over 500 million dollars a year has been funding late-stage startups for a few years. There is a lot of potential in Blockchain, Fintech, Biotech, IoT, and Korean entertainment, which are key growth areas for Korea.

It seems the culture has changed, as well as more and more young Koreans are looking to get into entrepreneurship. They have seen many successful Korean entrepreneurs build successful startups over the last decade. 

The Seoul city government plans to nurture 10,000 workers to prepare them for the 4th Industrial revolution and to help with unemployment through startups. Their Innovation Academy will train 2,000 young Koreans to play a leading role in the 4th Industrial revolution. In addition, they will double the number of spaces for tech startups by 2022. Furthermore, Seoul has cooperated with the justice ministry to introduce a startup visa fast track for young foreign entrepreneurs who want to start their business in Seoul. 

Korea’s New Deal 

Korea's New Deal

Due to the impact of COVID-19, South Korean President Moon Jae-in introduced the Korean New Deal back in July of 2020. The plan involves the investment of over $130 billion to create over 1.9 million jobs by 2025. It is based on two main policies: the Digital New Deal and the Green New Deal. The aim will be to combat the highest unemployment rate in Korea among the youth. The government will train 100,000 people in new technologies such as AI to establish energy-saving homes, buildings, and electric cars. Furthermore, the Korean government will make 140,000 sets of state data public in order to promote the big data industry in South Korea. The Korean New Deal will also offer unemployment insurance for many workers, including both freelance and part-time workers. 


Silicon Valley of Korea

Silicon Valley became successful because the United States opened its doors to skilled foreign workers. In 1990, President George H.W. Bush signed the Immigration Act of 1990 called the H-1-B Visa. This new visa system allowed a large amount of global, highly skilled talent to work temporarily in the United States. The industry that was most affected was the tech centers, mainly in Silicon Valley. Many tech companies were able to recruit the best of the best from China, India, and so on. For example, the India Institute of Technology in Mumbai’s most elite engineering grad students moved to the United States.

Most ended up in Silicon Valley and became the top destination for global science, math, and computer science. Many of these immigrants played a key role in creating some of the top tech startups, creating hundreds of thousands of jobs for Americans. 

The E-7 Visa

Korea has its own form of H-1-B Visa, which is called an E-7 Visa. This allows employers to hire skilled foreign workers to work in Korea. The aim of these workers is to help fill a critical worker shortage in Korea. As well as allow Korean companies to remain strong and competitive globally. This will ultimately lead to the creation of thousands of jobs for Korean workers. However, the Korean government did not take into account Korea’s working culture, which demands brutally long workers and an overload of work. Not many workers were willing to move to Korea and conform to Korea’s working culture.

Most foreign workers in Korea have bad experiences in the Korean workplace. Many leave or at most stay for only a few years until they can get a better job in a more western-style company. Therefore while they are Visa options for foreigners looking for work in Korea, many don’t stay long enough to make a real impact. 

Entrepreneurs in Korea

The number of startups in South Korea in 2019 was close to 30,000, with over 100,000 startup employees. Just 20 years ago, the number of startups was below 2,000. A vast majority of these startups are in Seoul (Gangnam District). This helps drive trends and word-of-mouth about new products and services very quickly. Seoul is essentially a single-market city within a conservative culture slowly adapting to entrepreneurship.

Thanks to so many startups in Korea, many Koreans now have an alternative to working for a big conglomerate like Samsung, Hyundai, or LG. The older generation is starting to embrace entrepreneurship a lot more than in the past. Now young Koreans have the alternative to being an entrepreneur and running their own business. There are many government programs in Korea that help nurture new business ideas. In addition, there has been a rise in startup accelerators and incubators across Korea in many different sectors. 

Foreigners working in Korea

One of the issues South Korea has been having has been retaining foreign talent. If you go on the internet, you will find many horror stories of foreigners who have worked for big corporations like Samsung. Usually, when foreigners join a Korean company, they will work with Koreans. Many times they will be the ONLY foreigner in the company or team. Therefore, lately, it is very common to see job postings from Korean companies that require you to speak business-level Korean. Therefore, Korean companies will not have a wide selection of talent to choose from.  

It is natural for many foreigners in Korea to feel isolated, as most of the blame/responsibility will fall on them. Add this to the lack of communication due to language barriers, and you have a terrible working environment. Therefore foreigners need young Korean entrepreneurs with a global mind in order to bridge the gap for a productive working environment. Foreigners working for Korean startups have better experiences because these younger Korean CEOs understand that the rigid working styles of past generations will not work in this fast-paced, innovative working environment. 

The Korean Working Culture

Koreans overworking

Korea’s working and living culture are slightly different from the West. The hours at a Korean company are very long. While it might say 9-6, in reality, you can’t leave at 6 pm. You must wait for at least an hour, and if there is more work to do, you must finish it before leaving. Even if that means working until 1-2 am. You most likely will not get overtime. Korean bosses usually have crazy demands and deadlines, which you can never question in public. Thankfully young Koreans and foreigners are slowly moving away from this archaic Korean working culture.

Korean Government Support for the Korean Startup Ecosystem

The Korean government has encouraged more Korean entrepreneurs rather than foreign startup entrepreneurs. For example, the TIPS (Accelerator Investment-Driven Tech Incubator Program for Startups) in Korea offers the Korean government support to share the risk of business failure. However, it requires the startup to have at least one Korean startup founder in the company. This is why you don’t see a lot of foreigners working in Korea starting their own businesses. There are a few programs, such as the Seoul Global Startup Center, which helps foreigners in Korea start businesses in Korea. Therefore, these startups don’t need to find a Korean co-founder. However, it will be very difficult for foreign startups to win government contracts without a Korean co-founder. 

Startup Funding in Korea

Funding in South Korea really started to take off in 2014. It went from $71 million in funding in 2013 to $949 million in 2014. Then went to an all-time high of $1.8 billion in 2015. These days it has settled down to around $500-$600 million per year. However, from 2017-2019 many Korean Blockchain startups have found success raising funds through an ICO. Currently, in 2020 the ICO scene is pretty much nonexistent. However, many Korean investors are still interested in Blockchain technologies, and alternative fundraising methods could rise in 2020 through IEOs or STOs. All this shows that Korea has a large and diverse range of investors, Korea-based funds, corporate VCs, Angels, and crowdfunding systems, just to name a few.

Accelerators in the Korean Startup Ecosystem

South Korea has many Accelerator programs, Angels, and VC firms. Some of them include:

Softbank Ventures

Softbank Ventures Asia, which was formerly known as Softbank Ventures Korea, specializes in IT startup investments. They recently opened a brand in Singapore in early 2019. Now have offices and investment managers in Singapore, Shanghai, Seoul, Beijing, San Francisco, and Tel Aviv. They are famous for their $1 billion investment in Coupang. They have a $500 million fund and will focus on early-stage startups.

Stonebridge Capital

STONEBRIDGE CAPTIAL, which now goes by Stonebridge Ventures, has been responsible for private equity since 2017. They currently manage a private equity fund worth a little over $1 billion. They focus mainly on the biotech industry. Their assets are worth over $350 million with an annual rate of return of around an impressive 25%. Their CEO is Yoo Seung-woon who headed Kakao Ventures and is well experienced in the IT industry.

Korea Investment Partners

Korea Investment Partners, the leading venture capital firm in Korea. They made headlines in late 2018 for investing in TEMCO, a blockchain-based supply chain platform. This was their first-ever investment in blockchain. KIP (Korea Investment Partners) manages over 40 funds with assets under management totaling $2 billion. Since 2010, KIP has liquidated 12 funds with an average internal rate of return of 18% and no net loss on any fund. KIP backs, on average, 120 companies every year.

MBK Partners

MBK Partners, the largest and most successful independent private equity firm. They have gotten bad press due to the labor issues of one of their holding companies, Homeplus, a discount store chain in Korea. MBK bought Homeplus in late 2015 for $6.2 billion. Due to online retailers as well as Costco, Homeplus has been losing a lot of value. They are known for their annual special situations fund, which was at $850 million in 2018. Since its founding in 2005, MBK Partners has over $16 billion under management and has invested $12.9 billion in 38 companies. They have five offices located in Seoul, Beijing, Hong Kong, Shanghai, and Tokyo with over 60 investment professionals.  


SparkLabs, is a Seoul-based accelerator for early-stage Korean startups that want to go global. They also have a cybersecurity and blockchain program in Washington D.C. Sparklabs has a dedicated blockchain fund called SparkChain Capital. Sparklabs Group is a network of accelerators and venture capital funds that have been active investors in Fintech since 2013 across Asia, Europe, and the U.S.


Hashed –  Hashed is a blockchain accelerator and investment fund based in Seoul as well as San Francisco. They invest in blockchain startups as well as help with community building and acceleration. They are Korea’s largest Blockchain fund. Hashed was founded in 2017 and became famous for raising 150,000 Ether through an ICO for ICON Foundation. What started out as a $600K digital assets fund pooled together by partner investments is now worth $250 million. They are currently the largest holder of ICON and EOS in Korea.

..just to name a few…

Corporate Support for the Korean Startup Ecosystem

Korean Startup Infrastructure

I have not mentioned some big corporations that have started their startup hubs like Lotte’s Accelerator Program, Samsung’s C-Lab Space, or Naver and their Startup Alliance. Many big corporations in South Korea are actively investing in local startups and helping support open innovation in Korea. However, there is still a large talent gap compared to the United States. We are talking about talented programmers, engineers, and developers.

The top graduates tend to want to work for global companies like Apple or Google. Most of the gifted students in Korea tend to want to study abroad in the UK or the US. Once there they usually don’t come back to Korea. Many corporations in South Korea have started their own accelerator programs to find talent and new innovative ideas. 

Corporations embracing Blockchain in Korea

Corporations in Korea have always embraced new technologies. One of these technologies is Blockchain. Kakao, the top mobile platform in Korea, started Ground X, which will focus strictly on Blockchain to create a scalable blockchain platform to help with mass adoption. This could open the door for new and innovative blockchain startups to work with Kakao and take advantage of their infrastructure. 

There is still pressure from the old generation in South Korea to get stable, secure jobs with big conglomerates like Samsung, LG, and Hyundai.  However, like most corporations, they can’t adopt new technologies as quickly as startups. While many Koreans still have a lot of fear about starting their own business, especially a startup. The idea of working with new and trendy technologies like Blockchain could be a gateway for more Korean entrepreneurs to enter the startup scene. Since Korea is always looking to find the next tech wave. Therefore there will always be an opportunity to join or start new and disruptive startups.

Korean Startup Ecosystem Infrastructure

Korean Startup Ecosystem Infrastructure

Currently, there are over 100 co-working spaces in Korea. Some of the big names include WeWork, Fast Five, Fab Lab, Google Campus Seoul, Maru 180, and the most recent HEYGROUND. South Korea also has over 150 accelerators, incubators, and Innovation Centers. HEYGROUND impressed us the most with their community of changemakers managed by ROOT IMPACT. Their facility is also great with their high-end design, open-concept workstations, and a restaurant and bar on the bottom floor.

There is even a Blockchain coworking space/co-living space in Seoul called nonce. COVID-19 has impacted many of these coworking spaces, and more and more companies in Korea are looking into remote work environments. It will be interesting to see if any of these coworking spaces in Korea will be able to survive as the future of work could change around the world. 

K-Startup Challenge

The Korean government also assists in programs to help the startup ecosystem. South Korea has the highest government backing per capita for start-ups. I mentioned TIPs earlier, but the K-Startup Challenge also promotes collaboration between domestic and foreign startups. All companies from the K-Startup Challenge work out of the Pangyo Global Startup Campus. The Campus was opened in 2016 by the Korean government as part of a new startup hub. The K-Startup Challenge and the Seoul Global Startup Center are focused on bringing in foreign entrepreneurs to start businesses in South Korea. If they are successful, they will be able to hire Koreans, increasing jobs in Korea. 

Korean Startup Ecosystem – Blockchain Ecosystem in Korea

Blockchain Ecosystem in Korea

The Korean Startup Ecosystem got a huge boost from the Korean Blockchain explosion. Since late 2017, Koreans have been buying cryptocurrencies from around the world. Then selling they in Korea because of the price difference between exchanges. This was called the Kimchi Premium, and even mom and pops that knew nothing about cryptocurrencies started to buy it. While this boom has long passed, South Korea is one of the few countries in Asia that is very open to Blockchain technologies. 

Korean Startup Ecosystem – Crypto Exchanges

Korea also has two of the biggest cryptocurrency exchanges in Bithumb and Upbit. There are dozens more and more that should increase if regulations are set. The Seoul City government is also partnering up with ICON to create a Seoul Coin to replace T-Money cards in the future. Seoul is investing a lot into creating a strong Blockchain industry in Seoul. It is devoting over $100 million to building a blockchain complex near Seoul. Over 200 Blockchain startups will be incubated there. The complex will be essential for early-stage Blockchain innovation. The Korean government has also created the Seoul Innovation Growth Fund for Blockchain and Fintech startups in Korea. This fund was created for those having trouble raising Series A funding.

Despite the fact that Korean exchanges got hacked like Upbit, Bithumb and the fact that ICOs are still banned, cryptocurrency trading continues in South Korea. Many Korean investors exploited bitcoin arbitrage and ended up making quick and easy money. Once the common investor caught on and got in, the price of cryptocurrencies crashed. Many were left with almost nothing. Those that made money are still looking for the next big wave and Blockchain startups that could become the next startup unicorn. 

Cryptocurrency Regulations in Korea

Still, Koreans are calling for mass adoptions and for the Korean government to step in with regulations. The Korea Blockchain Enterprise Promotion Association has been tasked to create these regulations, but nothing has come out. Jeju is a potential place for being a special Blockchain region in Korea. Korean Blockchain startups can run their ICOs and test Blockchain services and technologies in Jeju. Cities like Gwangju also want to become the Crypto-valley district. So it seems it is not a matter of if but when as it comes to cryptocurrency regulation. Once cryptocurrency regulations are set in Korea, there could be another crypto boom in Korea.

Korean Startup Ecosystem – Blockchain events

Since 2018, Korea has held Korea Blockchain week, which included Blockchain events, meetups, investor meetings, workshops, and networking events. Beyond Blocks is one of the main Blockchain events in Seoul as well as Deconomy. In 2019, FactBlock, a global Blockchain accelerator, hosted D.FINE for Korea Blockchain Week. However, due to COVID-19, all events, not just Blockchain events, have been put on hold. 

Blockchain Events in Korea

Since ICO projects were banned in Korea, many Korean Blockchain startups went to Singapore, Hong Kong, etc. However, while ICO projects are banned, the Korean government has no issue with Blockchain technologies. As mentioned above, Ground X by Kakao is looking into Blockchain technologies. SK Telecom, Korea’s largest wireless telecommunications network, announced it would adopt Blockchain payments and security functions.

Korea’s Strengths/Weakness

Korea’s Strengths – Korean culture

Korean Kpop Culture

South Korean popular culture is growing every year. Korean beauty products are thriving thanks to successful Korean startups like Memebox. There are over 8,000 K-Beauty brands in South Korea. Korean K-pop is bigger than ever thanks to Big Bang, 2NE1, and EXO groups. Korean Dramas are still being watched by fans worldwide, which helps drive the latest trends in Korean Fashion. 

Korea’s biggest K-pop Band BTS has broken all records on Youtube. Also, they were the first-ever Korean musical host on SNL. Thanks to the success of BTS, their Entertainment company, Big Hit Entertainment, will be doing an IPO, bringing its market value to an incredible $4 billion. 

The rise of Korean content can be attributed to how well connected digital Korea is to the world. The Korean IT infrastructure is one of the best in the world. The country has the best internet connection and most Koreans own smartphones. Koreans are early adopters of new technologies and early trendsetters for fashion. Companies are always looking for the newest platforms to distribute their content worldwide. Korean influencers have found much success on YouTube, Instagram, and even TikTok. 

Korean Startup Ecosystem – Fintech

Fintech is also huge in the Korean Startup Ecosystem, as Korea is becoming the cryptocurrency exchange and services leader. Korea looks to become the leader in the global financial centers. Soon Seoul will become the FinTech hub of Asia. One of the top Fintech startups in Korea is Viva Republica. They are the developer of Toss. A mobile payment tool looking to go global after much success in Korea. Fintech startups in Korea will help Korea become a cashless society if it is not already there now. 

Korean consumers

Korean Consumers

The Korean startup ecosystem benefits from a great consumer market. Their middle class is the majority. Most people living in Korea have smartphones and credit cards. They have the highest GDP per capita, wireless penetration, infrastructure, and fast LTE. All these elements combine to make a great home market to grow your startup.

This is why Korea is able to support companies and startups in Korea that are focused only on the domestic market. Korea has 50 million very tech-savvy residents. That is one of the main reasons why Korea is able to support a massively scalable business. Some examples would be companies like Naver, Coupang, and Ticket Monster that solely focus on the Korean market.

Korea’s Weakness

Cost of living

Living in Korea

The Korean Startup Ecosystem has weaknesses they have to work on. The cost of living in Seoul is very high. Especially in Gangnam, where you will need to deposit $10,000 and a monthly payment of at least $600 just for a one-room studio. Therefore most Korean startup entrepreneurs commute in and out of Seoul to avoid the high living cost. Office spaces are expensive as well, which is why many Startups are moving into co-working spaces. Starting a startup is hard enough for Korean entrepreneurs. The last thing they want to do is spend their money on rent. 

Things have gotten to the point that Gyeonggi-do, a province in Korea, recently implemented a UBI in Korea called the Youth Basic Income program, where every 24 years old in the province got 1 million won per year. The 2020 Korea Basic Income Fair expressed the need to help support the youth as they look to enter the workforce or start their own business. UBI is a very progressive idea. It has become a hot topic in Korea since the COVID-19 outbreak. Koreans got a disaster relief income for all citizens for the first time, which has been widely praised. 

Finding the right investor

Investors in Korea need more education about investing in startups. There is a lot of “old” wealth in Korea, which has come from real estate and family inheritance. Most of these old investors WANT to invest in tech startups. The problem is that they don’t know a lot about it. Hopefully, this will change as successful startup entrepreneurs give back to the community.

Korea still holds a corporate mentality. Therefore it is up to the 2nd and 3rd generations of traditional Korean startup entrepreneurs to the ranks of their family hierarchy. This is the only way Korean startups will be able to go global. They must throw away the old Korean corporate mentality and bring fresh minds. The lack of global know-how for Korean startups really holds back the development of the Korean Startup Ecosystem.

Where are the unicorns?

There have been many startup success stories. However, South Korea does not have many “Unicorns.” South Korea has 12 Unicorns currently, such as Coupang (e-commerce), Kakao (Internet), and Yello Mobile (Mobile commerce), just to name a few. Korea needs to produce more global startups and Unicorns. The Korean government understands this and plans to increase the number from 12 to 22 by 2022. Exits boost a startup ecosystem progression that allows Korea to attract global resources, accelerating growth.

It is hard for most Korean startups to break out internationally due to their lack of localization ability. Therefore most Korean startups tend to focus more on the local market, which limits their potential. Therefore, the Korean startup ecosystem is a bit behind the United States. It will still take a few years to catch up.

Conclusion of the Korean Startup Ecosystem

South Korea must continue investing in programs to help the Korean startup ecosystem. Entrepreneurship has proven time and time again to be the #1 driver for job creation and economic growth. South Korea will never be able to compete with Silicon Valley or Shanghai. However, they can leverage their own unique assets to create innovative startups.

As long as they push to bring in more and more international talent into Korea, Korean startups will likely have the chance to go global. Korea’s potential is there, and many countries are recognizing it. I fully believe that the Korean startup ecosystem will continue to accelerate. At the same time, it will produce global startups and hopefully some Unicorns.