Why it is the Perfect Time to Start a Startup in Korea

2023 represents a unique time in South Korea as it looks to recover from the economic impact of COVID. New South Korean president Yoon Suk-yeol has been vocal in his support for the tech industry and especially supporting Korean startups. He spoke at CES 2023 on the importance of AI technology. Korean AI startups are focused on creating intelligent systems that can process vast amounts of data, learn from it, and make intelligent decisions in real time. By doing so, they can offer products and services that can help businesses unlock new levels of efficiency, productivity, and profitability.

First, before we even talk about why it is the perfect time to start a startup in Korea. We first need to answer why we start a startup in the first place. Startups are unique in that when you start, you are on an equal playing field with other new businesses. You don’t have to be young and straight out of grad school anyone can start a startup. All you need is an idea and a drive to make your dreams a reality. In some instances, being unknown and lacking in funds is seen by investors as a good thing…let me explain.

What are Korean Investors looking for?

An investor in Korea wants to find that diamond in the rough. A startup that no one knows about but them. Most might not think it, but Koreans, in general, like to gamble. There is a reason why the Korean government has outlawed gambling in Casinos for its citizens. Korea’s desire to gamble is also what drove the Korean cryptocurrency craze back in 2017. Their passion for gambling can be found in investing as well. Their goal is to invest in 10 unknowns in hopes one becomes big. As long as those unknowns are cheap, it is worth the risk. Instead of investing 500 million won into one company, most Korean investors would instead invest in 10 companies for 50 million won each. This is why early-stage (seed funding) is easier than the later stages in Korea. How do you find these angel investors in Korea? It is all about networking and knowing the right people.

There is a lot of material online to teach you how to bootstrap your startup. However, little information can be found on how to do it in South Korea. However, the process is the same, except most angel investors, are not fluent in Korean. Therefore it is crucial to have a Korean partner when raising funds from angel investors in Korea. So the question becomes, what kind of startup would get Korean angel investors interested? If they feel the startup can gain some traction with other investors looking for businesses that can take off post-COVID…it doesn’t matter if the startup is generating money…as long as they can gain traction among investors, initial seed funding will be easy.

When Should You Start a Startup in Korea?

Don’t start a startup unless you have an idea or solution to an existing problem. Granted, ideas can change, and the execution of the concept is way more important than the idea itself, but you need an idea first to start the startup. In Korea, the timing is right because of the increase in the desire of investors to jump back into the startup market. Remember their interest levels when it came to Blockchain and cryptocurrency. Investors in Korea are always looking for the next big tech trend. The trend now is businesses that can survive post-COVID. Delivery services, biotech companies, and digital content are the next hot trends. So focus on these sectors first.

The Korean government has funds supporting startups and is continuing its efforts to support new and innovative tech startup companies in Korea. South Korean Resident Yoon has promised to cut through red tape and provide financial incentives for young entrepreneurs, promising to support small and mid-sized businesses, including startups. This will be taken into overdrive as Korea slowly looks to recover from COVID. They are actively pushing government contracts to return money to small businesses in Korea.

South Korean President YoonHow do you know if your idea is any good?

Simple. Does the idea solve a problem? If so, will it solve it for the next 10-plus years? Keeping in mind that automation is on the rise. Video chatting, gig work, and medical innovation are issues brought up by COVID. Long-term thinking in startups is underrated but crucial because you are trying to build a lasting company. Remember, it takes many, many years to make a great startup. Don’t expect big results in the first few years. This is a grind, and payoffs might not happen until the next decade.

Also, make sure that the idea is something you care about, love, and, most importantly, something YOU can use. That is the perfect way of understanding your customers because you ARE the customer. It would be a waste and defeats the purpose of starting a startup you are not passionate about or don’t need.  The best ideas are usually the ones that sound crazy. This means that no one is probably working on your idea and probably no one will think twice about stealing it. An app that makes regular drivers into taxi drivers?? Sounds crazy right? Renting out your room to strangers?? Get out of here…

Why Start a Startup in Korea?

Korean Night Life

So why South Korea? Target a small market and expand from there. There is no reason to think big right from the start. The startup will be more successful if you focus on the small picture before you tackle the big picture. That is why many startups first test their product or service in Korea before expanding out into global markets such as Southeast Asia and beyond. The market evolves, and what the market looks like now will be completely different in 10 years. So there is a huge risk in going global right from the start. Start small and expand from there. Korea might be considered a small market compared to the US or China, but it is a fast and growing market, and that is what you should be looking for.

Is Getting Funding in Korea easy?

Korean Investors are craving the next big South Korean Unicorn. They are even willing to invest in imperfect startups just for the chance to hit it big.  Korea is becoming more globalized than ever. Young entrepreneurs are learning English and getting experience abroad, and Korean investors are taking notice. The growth does not seem like it will stop anytime soon. That is why in 10 years, the possibilities in Korea are endless.

Seoul is now the prime location to start a startup in Korea

During his opening speech, the late Seoul Mayor Park Won-soon once said that the Seoul city government would nurture 10,000 workers to prepare for the 4th Industrial Revolution. He aimed to combat the unemployment crisis in Seoul through startups. He was a major figure that pushed for innovation in Korea. There are a lot of support centers, like the Seoul Startup Support Center, that help with the unemployment issue in Korea.

Seoul plans to double the number of spaces for tech startups by 2025. Currently, there are 1,000 of these spaces. An extra 1,000 will be available to foreign businesses. This means that any entrepreneur, whether you are foreign or Korean, can join the Seoul Startup Membership, where they can receive customized support from specialized organizations.

Seoul has also cooperated with the justice ministry to introduce a startup visa fast-track program for young foreign entrepreneurs looking to start a startup in Seoul. They will also work with these young entrepreneurs to find affordable housing in Seoul, which can be expensive.

With all this support, Seoul is the perfect city to start a startup. Startups can constantly change depending on consumer needs. Consumers in Seoul are more open to new ideas and technology. Buying online is no longer a novelty. Sure, consumers in Korea will have less money to spend now; they will be smarter consumers looking for new businesses that offer better/faster service.


John is the Co-Founder of Seoulz. He has covered the Korean startup & tech scene for over eight years and has written over 700 articles regarding the Korean startup ecosystem. He has brought global attention to Korea's tech scene using Google SEO. Email him at john@seoulz.com

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