Invest KOREA

Over the last few years, South Korea has been in the global spotlight for its cars, smartphones, household appliances, and even culture. On the back of its solid economic fundamentals, the country is now experiencing an influx of foreign venture capital for its innovative startups. According to startup industry tracker The VC on Mar. 11, the number of Korean startups receiving foreign venture funding was at 32 in the first two months of 2024—a 1.7 fold increase from the same period last year—with total funding more than doubling to USD 135 million. VC industry insiders are seeing the recent inflow of startup funding as a positive signal for accelerating momentum in the market.

In line with such trends, we met with Sun Choi of US-based 2080 Ventures, to gain a deeper understanding of the Korean startup market based on his extensive experience working in venture capital. Aside from his position as founding partner at 2080 Ventures, Sun also functions as an angel investor. With a notable tenure as Managing Director of Asia at Mind the Bridge, a startup accelerator and open innovation advisory firm rooted in Silicon Valley, he has successfully contributed to two startup exits—an IPO for a tech enterprise by spearheading the development and launch of an AI-powered SaaS product. Additionally, he backed the acquisition of a beverage company, expanding its reach internationally. Sun’s professional journey commenced in a Japanese management consulting firm, advising Fortune 500 giants like Mitsubishi and Toyota, and his international experience spans over two decades, with extended stays in Canada, Japan, the US, and Korea, well-equipping him with a nuanced understanding of global markets and cultural diversities. Read on to find out more.

What do you think are the benefits of doing business in Korea?

Doing business in Korea offers a confluence of advantageous conditions, which I would encapsulate into three core areas. Firstly, the centralized nature of Korea's economy, predominantly positioned in Seoul, offers unparalleled convenience. The compact nature of the city allows for efficient business operations, minimizing transit times and maximizing productivity.

Secondly, Korea's government is particularly proactive in supporting foreign business ventures. This comes in the form of generous grants and incentives designed to foster innovation and attract international companies. In line with President Yoon's commitment to transforming Korea into a global startup hub, we can anticipate even more comprehensive support structures in the near future.

Finally, the corporate culture in Korea is increasingly geared towards open innovation. There's a significant appetite among established Korean companies to collaborate with new players, allowing for symbiotic relationships that can accelerate growth and innovation. This creates a fertile environment for startups and foreign businesses to not only thrive but also to drive transformational change.

What are some of the major startup trends you’re seeing in Korea’s startup environment? And how does this compare to countries with the highest startup success rates like the U.S., China and Germany?

The Korean startup landscape is unique in its government-led approach, which is somewhat atypical when compared to other global leaders in innovation. Most venture capital in Korea is sourced from government funds, making it a rarity to encounter a startup that hasn't benefitted from this support. This governmental involvement has the benefit of creating a stable foundation for startups but does also mean that the ecosystem has certain top-down directives.

When we examine the industry-specific trends, e-commerce, and gaming are standout sectors. The e-commerce strength is attributed to the nation's infrastructure that supports rapid delivery systems, backed by a culture that prizes speed and efficiency in services. This, coupled with a societal penchant for materialism and trendsetting, creates a continuous demand in the sector. Meanwhile, the gaming industry has carved out its distinctive path due to historical limitations on Japanese cultural imports. This restriction spurred the growth of home-grown internet and computer-based games, which, in turn, gave rise to the PC room culture—a social gaming experience that's uniquely Korean. These aspects not only differentiate Korea's startup environment from others but also create specific niches where businesses can specialize and succeed.

What are the main ways in which 2080 Ventures helps startups grow in Korea?

2080 Ventures propels startups by offering tailored support for product market fit and international expansion. Our approach is two-pronged: fostering growth within Korea and facilitating global market entry.

With a diverse mentor network exceeding 5,300 experts, we deliver comprehensive acceleration programs that refine startups' strategies, validate their business models, and ensure product-market alignment. Our guidance spans from foundational mindset shifts to operational execution, preparing startups for investor and partner engagement, thus enabling them to thrive both locally and globally.

What kinds of benefits do startup accelerators offer businesses that are seeking out investment?

Startup accelerators like ours bring a wealth of benefits to businesses seeking investment. Beyond the immediate infusion of capital, accelerators provide a nurturing ecosystem where entrepreneurs can access a breadth of resources, including an extensive network of industry contacts, mentorship from seasoned experts, and educational programs to refine their business acumen. These resources are crucial for startups to refine their business models, accelerate growth, and increase their market readiness.

Furthermore, accelerators often provide a stamp of credibility that can be instrumental in attracting further investment. However, it's imperative for startups to diligently research and select accelerators with a proven track record of success. The reputation and previous investments of an accelerator can significantly influence the perception of a startup in the eyes of potential investors, including notable venture capitals, who may take an accelerator's endorsement as a signal of a startup's potential.

What advice would you give startups for boosting their competitiveness in Korea, and for increasing their chances of attracting investment?

For startups aiming to escalate their competitive stance in Korea and attract investment, it's imperative to delve deeply into the cultural and business dynamics prevalent in the country.

The Korean business environment still holds a strong preference for face-to-face interactions, which underscores the value of personal relationships in business dealings. The work culture is intense, and international founders must be willing to adapt to local practices and expectations. A successful integration into the Korean market goes beyond just professional adjustments; it extends into everyday life. For instance, international founders need to navigate through local digital landscapes, opting for widely-used platforms like Kakao and Naver over Western counterparts like Google Maps. This cultural adaptation is more than just a necessity—it’s a strategic move.

By embracing and understanding the nuances of Korean lifestyle and business etiquette, startups can significantly enhance their appeal to local investors and partners, which is often a crucial factor in securing investment and achieving business success in Korea.