As the economic downturn looms, venture funding for startups has shrunk globally in the last quarter of 2022. The Korean government is working hard to support startups in the country through ventures such as easing regulations for funders and starting new government support funds.
The South Korean government recently announced the launch of a 100 billion won ($76.85 million) worth fund to nurture 30 food tech unicorn startups by 2027. The Ministry of Agriculture, Food and Rural Affairs announced the plan during an emergency ministerial meeting on economic affairs. The fund has been launched considering the fast-growing sector of food tech.
Food tech refers to a new industry where advanced technologies such as biotechnology, robotics, and artificial intelligence are applied to all value chain processes, from food production to processing to distribution. Examples of food tech products and solutions include vegetable substitutes, food printing, online distribution platforms, unmanned ordering machines (kiosks), and delivery/serving/cooking robots.
In recent years, the food tech market in Korea has grown rapidly. The market has expanded from 27 trillion won in 2017 to 61 trillion won in 2020, posting an average annual growth rate of 31.4 percent. This is 6.5 times the average growth rate (4.8 percent) of the country’s entire food market over the same period.
The Korean ministry expects the country‘s food tech exports to quadruple by 2027 from $500 million in 2022. The ministry aims to increase the number of food tech unicorns to 30 by 2027. It already has two food tech unicorns: Market Kurly and Oasis Market.
The 100 billion won fund will start with 10 billion won next year. In addition, the government will launch efforts to legislate the basis for supporting the local food tech industry. For this, it will submit a bill dubbed the Special Act on Fostering the Food Tech Industry during the first half of next year. The government also aims to support food tech companies to expand into overseas markets.
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