For Korea’s startup ecosystem, scale-up financing remains the decisive factor in transforming promising ventures into global players. While infrastructure and regulatory reforms matter, founders consistently point to capital access as the foundation of survival. Korea’s tiered Unicorn Support Framework—spanning Baby Unicorn, Baby Unicorn Plus, and Pre-Unicorn programs—has become a cornerstone, blending venture capital with government-backed guarantees to accelerate international competitiveness.
Funding at the Core of Korea’s Startup Scale-Up Strategy
In Korea’s drive to nurture unicorns—unlisted companies valued at over KRW 1 trillion—funding stands out as the most urgent priority.
A 2023 survey by the Korea SMEs and Startups Agency found that 81% of 312 startups cited “business expense support” as the area where assistance is most essential.
Responding to this demand, the government and its financial institutions have expanded targeted funding programs. And at the center of this Unicorn Support program is the Korea Technology Finance Corporation (KIBO), which runs a tiered framework to help startups scale into unicorns.
The Three-Tier Unicorn Support System
KIBO (also known as KOTEC) manages three flagship programs — Baby Unicorn, Baby Unicorn Plus, and Pre-Unicorn — each designed for different growth stages. All three prioritize capital access, making them highly competitive entry points for founders seeking scale-up funding.
Baby Unicorn: Early-Stage Financing with Special Guarantees
The Baby Unicorn program targets startups that have secured ₩2 billion to under ₩10 billion (~$1.5 million–7.7 million) in venture investment and hold a qualifying technology evaluation rating.
Benefits include:
- Market Development Funds of up to ₩300 million (~US$230,000)for domestic and overseas market research, partner discovery, and analysis.
- A Special Guarantee of up to ₩5 billion (~US$3.8 million), easing loan access from commercial banks. With KIBO backing, banks are more willing to extend credit — a critical mechanism for early-stage companies struggling with liquidity.
These guarantees directly determine whether early-stage startups can secure loans, which explains the program’s consistently high demand.
Baby Unicorn Plus: Bridging Toward Global Expansion
The Baby Unicorn Plus scheme supports companies that have already been selected as Baby Unicorns for a certain period, helping them advance in scale. The emphasis shifts from early funding toward global market entry.
Eligibility requires:
- Raising at least ₩5 billion (~US$3.8 million) in venture capital.
- Posting an average annual sales growth rate of 20% or more over the past two years.
- Alternatively, achieving a corporate valuation of ₩50 billion (~US$38.5 million) or higher.
Selected firms receive:
- Up to ₩300 million (~US$230,000) in global expansion funds.
- Access to domestic and overseas VC meetings.
- Mentoring through Korea Institute of Startup & Entrepreneurship Development (KISED) networks abroad.
This support helps Korean startups transition from local traction to international competitiveness.
Pre-Unicorn: Scale-Up Backed by Large Guarantees
The Pre-Unicorn program targets later-stage startups preparing for full-scale expansion. Entry requirements are stricter, but the level of support is significantly higher.
Eligibility includes:
- At least ₩5 billion (~US$3.8 million) in domestic venture funding.
- An average 20% annual sales growth rate over the past three years or an increase of ₩10 billion (~US$7.7 million) in sales compared to the previous year.
- A KIBO technology business evaluation rating of BB or higher.
Alternatively, startups with a valuation of ₩100 billion (~US$77 million) or more and a B grade or higher may also apply.
The key feature of Korea’s Pre-Unicorn program is a Special Guarantee of up to ₩20 billion (~US$15.4 million), tailored to each company’s technological capacity and business performance. For scale-ups eyeing overseas expansion or infrastructure investment, this guarantee functions as a decisive financial lifeline.
Selection Trends and Market Impact
Since its launch in 2019, the Pre-Unicorn program has designated 125 startups. By the end of August 2025, 15 new companies will be added.
While earlier years saw close to 30 companies selected annually, recent cycles have reduced the number to around 15, reflecting stricter evaluations in market validation, growth trajectory, and innovation capacity.
A startup CEO told Seoul Economic Daily,
“Many companies participate in Korea’s Unicorn support programs to access KIBO’s special guarantees. For startups facing difficulties with bank loans, this guarantee support plays a critical role.”
Korea’s Unicorn Support Program: Strengthening Global Competitiveness
Korea’s unicorn support framework illustrates how venture investment and government-backed guarantees combine to fill critical funding gaps.
By aligning early-stage financing, global expansion support, and scale-up guarantees, the system addresses structural funding gaps that private investors alone cannot cover.
This tiered approach creates a continuum of support that helps startups move from early venture-backed growth to global scale-up. By anchoring survival financing and international expansion pathways, the Unicorn Support program strengthens the global competitiveness of Korean startups while offering a structured route into overseas markets.
At a time when innovation financing is reshaping ecosystems worldwide, it provides a grounded case study in how targeted government programs can accelerate the scale-up journey.
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