The Korean government’s support for small and medium businesses showed in an announcement from the SMBA (The Small and Medium Business Administration) saying that angel investments in 2015 for Korean startups were more than $88 million. If you take into account the tax exemption limit laws where investment profits that are earned in 2015 are taken out from income tax until 2018, the total investments reaches over $100 million which would be just over 140 billion won.
Startups in Korea have seen huge support not only from the Korean government but also private investors, angel investors, and accelerators that want to make Korea a tech startup hub in Asia. This was in response to the venture business bubble bursting in 2004 where Korea saw investments in startups drop to around $40 million. However since then, year after year, investments have gone up to what we have now.
The number of investment firms reached to 89 by the end of 2015 and now through the first half of 2016 that number is more than 100 and continues to grow. For those that thought the startup scene was dead, they should see the data that was released by SMBA which clearly shows that investments and funds are growing rather than slowing down.
More and more angel funds are investing in Korean startups, these Korean startups are doing a better job at going global and partnering with larger domestic and international firms. For example, Y-Combinator which is an American seed accelerator recently invested in Korean startups Miso, a home cleaning service, and Seerslab, a video application developer for mobile devices.
Venture capital firms in Korea are on the rise as well as accelerators and incubators. However the major rise is in angel investors because of the introduction of something called a “angel matching funds” in which a matching investment is put into a venture company that an angel investor is investing in by the Korean government. Add that to the expanding tax incentives for angel investors and it is easy to see why more and more angel investors and angel funds are being created.
“As angel funds reached a record high last year, the venture investment ecosystem is picking up pace,” said Park Yong-sun, director of venture investment at the SMBA.