We wrote previously about the current situation in the South Korean startup ecosystem. We said that the global startup capital is declining whereas the Korean venture world is seeing more fundings, more startups, and more enthusiasm.
The rise of startups in Korea really started with KakaoTalk i n 2010, and since then we have seen $191 million US dollars raised in Korea (in 2013, up from $189 mil in 2012), and increase in startup numbers. Now we are seeing twice as many startups than we did in 2008. So, with KakaoTalk's success (and AniPang's success, by Sundaytoz - we'll write about this soon), and with a major flare in mobile and tech, there's much enthusiasm about startups in Korea. Bum-Su Kim, the Founder of Kakao said that he literally had 'no idea' that the company would expand intensely and internationally. KakaoTalk is now the number 1 messaging app in Korea and has expanded internationally to include a whopping 94 million subscribers worldwide, in more than 230 countries around the globe.
And he's back. Kim returned his support and started helping many other startups - for example, K Cube Ventures received the seed funding of $4.8 million.
The Korean government is obviously backing this up, although people say that they're funding the more 'big' startups. Still, support is support. The government under the Park administration has been backing the surge of startups by giving support to venture startups and the ecosystem. The government has spent at least $2.9 billion in support - and let's not forget the countless meeting that ministers would have had with IT and tech related firms such as KT, SK Telecom, and LG Uplus. If you've been reading the news here, you'll know what I'm talking about - those three major telcos will now invest in startups for the next coming years.
State based funding and subsidized loans to startups in Korea, we hope to see the revamping of the startup world here. The youth unemployment is at 8.4% - and let's not forget student loans. Hopefully we can push those numbers down and spark employment growth this year.
Now, back to KakaoTalk - what do they have to do with this all? Well, the government fund was jointly created with Kakao, aiming to support Korea's rapid growth of startups in the IT and ICT sector. Especially - in mobile tech and apps. Mobile is getting huge - right? We also wrote about this, so check it out. And how much did they all chip in?
The "Kakao Young Entrepreneur Fund" aims to support Korean startups especially in mobile and apps and is worth US$27 million. Kakao and Korea's SMBA (Small and Medium Business Administration) signed this agreement - and this is the first time that a tech company paired up with the goverment to create an initiative that targets those under 40 and with less than 3 years experience. And this is hugely different from existing measures that helps startups, because it's "different [from] existing funds which only invest" - the investors will also share their entrepreneur experience with budding startups, and guide them through the life cycle of a startup.
President Park has expressed her plans to foster and support startups to revitalize the Korean economy. Zuckerberg will visit Korea at the end of the month, so we'll see how their meeting goes. So Korea's well on their way to becoming the next Silicon Valley of Asia, it seems. What do you think?