Job seekers line up to enter a startup job far held in Seoul on October last year. (Newsis)
Startups in the artificial intelligence and health care sectors have secured the largest portion of investments in February, with Korea seeing a reignited funding market, a research firm said Tuesday.
Local startups garnered a total of 93 investments worth 441.75 billion won ($336 million) in February, according to a report released by market intelligence firm Startup Alliance Korea.
The investment volume shows a 48.6 percent jump compared to February 2023.
Of the total amount, fabless AI chipmaker DeepX attracted the largest investment of 90 billion won, followed by educational technology firm Flexcil (50 billion won), PRND Co., which is the operator of used car dealing app Hey Dealer (45 billion won), senior care provider Caring (40 billion won) and medical tech company Bertis (20 billion won).
The firm explained that cross-industry solutions including the AI tech and health care sectors secured the largest amount of funding, racking up investments worth 120.85 billion won and 107.96 billion won, respectively.
Startups in the e-commerce and logistics, game, leisure and travel sectors secured the smallest amounts.
February’s figures are slightly lower in both number and size compared to the local startups that attracted 108 investments totaling 449.7 billion won in January.
Travel tech company Myrealtrip (75.6 billion won), deep learning-based software company StradVision (42 billion won), beauty branding and marketing company Geni-us (30 billion won) and game developer Hound13 (30 billion won) topped the funding list.
Startup Alliance Korea assessed that the investment environment for startups has improved, after experiencing a dip last year due to the high interest rates and economic slowdown. Last year, a total of 5.33 trillion won in investments were secured for local startups, marking a 52.1 percent drop on-year.
"It seems the recovery in startup funding seen from the second half of last year is continuing," said Lee Ji-young, a research fellow at Startup Alliance Korea.
"With the funding heavily focused on the AI and health care sectors, it is hard to say that the overall industry is experiencing a recovery,” Lee said.
Startup Alliance Korea further explained that local startups garnered 85 investments from foreign funds last year, which adds up to a volume of 1.16 trillion won last year. It was the first time for the firm to disclose a figure on foreign investments.
Other reports are also assessing an increase in investments from foreign capital for local startups.
According to another venture investment platform The VC, Korean startups attracted 32 investments worth 174.4 billion won in foreign capital in the first two months of this year, marking an increase from 19 investments adding up to 74.5 billion won in funding in the same period last year.
The surge partly results from the base effect, as the inflow of foreign funding for startups had plunged last year. In 2023, 120 investments with foreign capital were secured for local startups, nearly dropping to half compared to the figures of 241 in 2021 and 257 in 2022.
Meanwhile, the Korean government has been putting forward the “Startup Korea” initiative since August 2023 in a bid to foster more startups. On Feb. 20, the Cabinet passed an amendment to the Support for Small and Medium Enterprise Establishment Act and its enforcement decree to allow the government to expand its support for startups launched overseas by Korean nationals or companies. Previously, the governmental support for startups was limited to those launched in Korea.
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