Korea’s startup ecosystem is the strong breeding ground of unicorns or ‘billion dollars’ companies. It’s been a great first quarter in 2022; three startups got the unicorn status in a few months. The thriving startup ecosystem can be attributed to the efforts by the Korean government to identify and nurture companies that have the potential to take over the world. Korea’s Ministry of SMEs and startups has been running the ‘Baby Unicorn 200 Nurturing Project’ to discover promising startups verified for their innovative business models and growth potential and nurture them as preliminary unicorns (enterprise value of 100 billion won or more).
In 2022, the Ministry of SMEs and Startups has selected 60 promising SMEs with the potential to grow into Korea’s leading unicorn companies (unlisted companies with a corporate value of more than 1 trillion won). This year, 284 SMEs applied, showing a 4.7:1 competition ratio. On May 25, 60 baby unicorns were selected after an in-depth evaluation of technological innovation and growth potential by professional judges.
Startups with great business potential, technological excellence & strong base
The 60 final selected companies had an average work experience of 5.1 years, sales of 4.64 billion won, and employed 35.9 people (as of March 31, ’22). In the technology and business feasibility evaluation of the Korea Technology Guarantee Fund, half (46.9%, 28) of the selected companies were excellent companies with a grade of AA or higher, and the average investment attraction amount was 3.82 billion won. By industry, a number of promising companies were selected, including 27 companies (45.0%) in the information and communication field and data/network/AI-based platform fields and 16 companies (26.7%) in the bio/health field.
‘Nature Mobility,’ which achieved the highest score in the final evaluation, is a company that has grown based on Jeju Island and operates ‘Zzimcar,’ a rental car price comparison platform. A major feature is that it provides integrated services, including air tickets and taxis, through partnerships with major domestic portals. In the final evaluation, it was evaluated by the expert evaluation group that “the future growth potential seems high in that it is constantly finding and operating niche markets among various mobility resources.”
The main item of ‘N1 Tech’ is a facility for producing copper thin films in secondary batteries, which are key devices for future electric vehicle mobility. The company possesses the core technology for copper thin film production facilities that can satisfy the requirements of light and small volume copper foils required by global battery manufacturers and is supplying the facilities to copper thin film manufacturers. Considering the competitiveness of the original technology and the proportion of exports (23%, KRW 3.3 billion / KRW 14.2 billion), the company is expected to grow rapidly in the global market.
‘Todak’ is a company that won the grand prize at the ’21 World Startup Entrepreneur Contest,’ which was supported by more than 100,000 startups from more than 200 countries. The low-income deaf support business model in underdeveloped countries was highly evaluated by applying the semiconductor manufacturing process to mass-produce manual-based products and lower the price. Todak developed a cochlear implant, a medical device that enables hearing impaired people hear sounds by applying electrical stimulation to the auditory nerve.
The Ministry of SMEs and Startups provides up to 300 million won in new market development funds to the selected baby unicorns. Additionally, special guarantees (up to 5 billion won), policy funds (up to 10 billion won), and preferential treatment for participation in R&D projects of the mid-term fund are available. In particular, this year, in addition to the existing linked support, various linked projects such as overseas expansion support, broadcast advertisement support, youth employment incentives, and ESG management introduction support are added to provide more generous support to baby unicorns. After selecting 60 baby unicorns this time, an additional 40 companies will be selected and supported in the second half of the year.
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