AI stock market boom brews as unicorns eye Korea listings

Several South Korean artificial intelligence-related startups are eyeing local stock market listings instead of pursuing Wall Street valuations, fueling expectations of a homegrown AI stock boom.

Though high-profile Korean startups had often chased US listings to avoid a valuation trap, following the footsteps of e-commerce giant Coupang, the tide is shifting with leading AI startups weighing domestic listings.

Rebellions, Korea’s first AI semiconductor unicorn, is expected to apply for a preliminary approval in August after closing its first-half books.

While Rebellions has hinted at going public on the Nasdaq, it is now expected to pursue a domestic listing first and seek other ways to gain US exposure. This could be by listing American Depositary Receipts, or ADRs, an approach pursued by Korean chip giant SK hynix.

“When it comes to the question of whether to list in Korea or the US, I believe we should pursue both,” CEO Park Sung-hyun said at a press event held in December.

“In terms of a timeline, domestic listing should come first. Meanwhile, there are already quite a number of companies with dual listings in Korea as well.”

Tech startups typically opt to debut on the Kosdaq, using the secondary market's special listing track that allows firms to go public based on technological potential rather than strict financial requirements.

But Rebellions is expected to list on the benchmark Kospi — a move that stems from its improved financials.

The unicorn's revenue has been on a steady upward trajectory, rising from 2.74 billion won ($1.8 million) in 2023 to 10.3 billion won on a consolidated basis in 2024, following its merger with Sapeon Korea, an AI chip spinoff from SK Telecom. Last year, the figure surpassed 27 billion won.

Having recently raised 640 billion won through a predebut funding round, industry officials estimate that Rebellions' IPO timeline is shortening.

Edge AI chip developer DeepX is another startup seeking to go public in Korea, despite calls from the US market.

Though US bourse operators sought a US market debut for the startup, betting high on its valuation, DeepX CEO Lokwon Kim underlined its intention to go public in Korea.

DeepX is currently focusing on securing investment from the state-led National Growth Fund. Though it has yet to appoint an IPO underwriter, the company expects to raise more than 600 billion won in pre-IPO funding.

FuriosaAI, a leading AI semiconductor fabless startup, recognized for turning down an $800 million takeover offer from US tech giant Meta, is considering a domestic listing as well, though a US listing remains on the table.

It is raising 750 billion won from investors in what is anticipated as the last funding round before an IPO. Expected to earn a valuation of over 2 trillion won, the startup is eyeing a 2027 market debut.

The reshoring rush comes as valuations in the local stock market have been improving, backed by the eased Korea discount.

“While tech-driven companies had sought US market debuts citing higher valuations, the recently improved local market environment appears to be turning the tide,” an official at a local brokerage firm said.

Another factor driving the shift is the government’s push to bolster the country's AI competitiveness, including large-scale policy financing initiatives.

The government plans to allocate a total of 50 trillion won to the AI and semiconductor sectors over the next five years through funding programs. Of this, 10 trillion won is set to be invested this year alone.

With a significant number of local AI startups expected to benefit from these funding schemes, overseas IPOs may become less plausible.

“The market deems it inappropriate for companies that have grown in Korea to list overseas, and receiving policy funding makes that view stronger,” an official at a local firm considering an IPO said.