| | MAY 2025 19The Korean venture capital and startup ecosystem has displayed a relatively resilient trajectory, even as global capital markets face persistent headwinds. A key driver of this resilience is a series of government-led policy funds, which have expanded significantly and compensated for the reduction in private capital contributions. Official figures indicate that venture investment size in Korea grew by around 9.5 percent from the previous year, reaching almost 9 billion USD, contrasting sharply with stagnant or marginally negative growth in other major markets. While this uptick underscores the country's commitment to fostering entrepreneurship, it also reflects the Korean government's determination to bolster early-stage and growth-stage financing through a more robust policy framework.Nevertheless, the overall ecosystem has not been immune to challenges. Early-stage investments--especially in `seed to series A rounds'--have declined by nearly 30 percent in terms of deal count and about 25 percent in aggregate deal value. This trend suggests that despite an overall rise in venture investment, newcomers still face considerable hurdles in securing initial funding. Higher interest rates and a global tightening of monetary policy partly explain this dynamic, as risk-averse capital becomes more selective and less tolerant of unproven business models. Yet, industry analysts posit that this contraction in early-stage funding may be cyclical. Interest rates are projected to decrease gradually by 2025, and such THE SHIFT FROM GROWTH-AT-ALL-COSTS TO SUSTAINABLE SCALING IN KOREA'S VENTURE CAPITAL By Yoonmok Yang, Investment Associate, DSC InvestmentSTARTUP INSIDERYoonmok Yang is a venture capitalist and Investment Associate at DSC Investment, with prior experience at Bain & Company and Hyundai Motor Company. He specializes in AI, venture funding and strategic growth. A KAIST graduate, he actively invests in startups, focusing on emerging technologies and global market expansion.Through this article, Yang emphasizes the resilience of Korea's venture capital and startup ecosystem, highlighting the role of government policy funds in sustaining investment and underscoring the shift towards scalable, revenue-generating business models as the key to long-term success. Yoonmok Yang
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