Beyond the Scale-Up “Death Valley”: Korea’s Next Test Is Building Global-First Startups, Not Local Giants

Korea’s startup ecosystem has learned to grow fast — perhaps too fast. The past decade’s state-backed acceleration produced record valuations and bold ambitions, but now the cracks are showing. With venture capital tightens and policies shift toward select industries, the country now faces a deeper test: can its startups evolve from domestically inflated players into global innovators—but not just ones built for international competition but also survive with enough endurance? Korean Startups Face Structural Limits at the Scale-Up Phase A painful reckoning is currently growing in the venture ecosystem in South Korea, as growing numbers of once-promising startups, some valued in hundreds of billions of won, have collapsed during their scale-up phase. This trend has brought industry observers to a broader structural problem in Korea’s excessive dependence on state subsidies, slow adaptation to market changes, and overreliance on short-term capital inflows rather than sustainable competitiveness. Amid a global economic slowdown marked by high interest rates, inflation, and a strong dollar, many Korean startups are struggling to maintain growth momentum. That is why analysts believe that unless the ecosystem evolves from…