korean technology, entrepreneurship, and startup ecosystem overview
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Seoul, The Hottest Startup Hub In Asia?
A look into Korea’s tech infrastructure and Startup Ecosystem
Nathan Millard @Nathan_mill
Autumn, 2014
It wasn’t always like this…
Gangnam 1950s
Gangnam 2013
Understanding Korea
25.6M in Seoul Metropolitan Area (1/2 of population)
Home of Samsung, LG, Hyundai, Hanlyu
Hard working (10-12 hours per day)
Tech-savvy & Engaged
Homogenous & Impressionable
Trend setters Pop culture, tech, fashion
Korea’s Economic Landscape
• $22,500 per capital GDP (higher than EU)
• Asia’s third largest e-commerce market (12%+ annual growth since 2006)
• Increasingly vibrant exit market (M&A and IPO)
• Engaged consumer base, eager to spend through tech
IPhone
• Fastest mobile broadband (excellent for content consumption)
• High smartphone penetration: 75%+
• Android-oriented (85% Samsung & LG)
• Kakao games platform boosting Google Play
• Currently, no serious challenge against Kakao Talk
• Telegram?
Korean Mobile Market Overview
Large (Korean) Corporations Dominate
= 85% M/S
= 96% M/S
= 2.5% M/S
= 97% Penetration
= 14% M/S
•#3 in the world for downloads
•#3 in the world for revenue
•25%+ online for 8+ hours/day
$100M USD monthly app revenue
App Opportunity in Korea
Whole population engaged
Gaming in Korea
• First country to have professional PC gamers
• PC rooms used to dominate free time (now mobile)
• Highly experienced gaming market place
• Exceptionally high consumer expectations
• Infrastructure supports ‘heavy’ games and apps
Anipang: First Kakao Game
Foreign games have arrived
80%-90% of app revenue from games
Koreans as App Consumers
•Highly trend-focused, social, and fickle
• 90% of top games released in previous month
•Local apps / services often triumph over imports
•Large marketing budgets are [now] required for engagement
•Localization can not be stressed enough
• World leader in mobile payments
• Extensive NFC enabled devices (SK Planet’s ‘T Cash’)• Used for 54% of in-app purchases
• Connected devices offer future opportunity
• Samsung aims to be IoT leader
• Korea is a great test market / gateway to Asia
• Bitcoin emerging (Korbit, Coinplug, CoinOne)
Mobile Payments Situation
Korean Unicorns
Unit: $Billions
“10 companies belong to what we call the “Korean Unicorn Club” (by our definition, Korean software companies valued at over $1 billion by public or private market investors)” – John Nahm, Strong Ventures (9/11/2014)
US Population: 318 million | S. Korea Population: 50 million (15.7% of US) US GDP: $16,8 trillion | S. Korea GDP: $1,3 trillion (7.8% of US) All Rights Reserved
• Traditional: Kstartup, Sparklabs, Tribeluga
• Corporate: Hanwha, Samsung Innovation Centre, Google Campus, SK Planet, Daum Accelerator
• Entrepreneurs: Future Play, The Ventures
• VCs: Bon Angels, CCVC, DEV Korea, Bootstrap Labs
• Universities: Innopolis, Yonsei, Postech
Startup Ecosystem
Accelerators
• Corporate funded: D Camp & Maru180, Startup Alliance
• International: Tribeluga, Google Campus, Intel Innovation, The Hub
• Government: Seoul Global Centre, Guro Valley
• Local: Dream Enter, SVI
Startup Ecosystem
Co-Working Spaces
• 130 Angels (around 5 active)
• Seed Investment: KOISRA
• Series A: Capstone, CCVC, Venture Port, Formation 8, K Cube Ventures, Strong Ventures, Smilegate Investment
• Series B: Altos Ventures, CyberAgent Ventures, Softbank Ventures, Qualcomm Ventures, IMM Investment, NeoPlux, Stonebridge Capital, DSC Investment, SL Investment
Startup Ecosystem
Investors & VCs
• $3.7Bn pledged for ‘Creative Economy’
• Legitimizing entrepreneurship
• Innovation centers in major cities
• TIPS program (1:5 & 1:7 matching)
• Doing too much?
Startup Ecosystem
Government
• Hanlyu (Kpop, Dramas, Movies)• On mobile and Global
• Gaming: Devsisters, Smilegate, NCSoft, Nexon, WeMadeEntertainment
• Online content distribution: Viki, DramaFever
Startup Ecosystem
Content Heritage
• IT infra that supports IT development
• Quality engineers, with strong work ethic
• Greater understanding of risk
• Entrepreneurs with global vision and bigger, better quality ideas
• Mentor networks and Angel investors
• Government support (money, PR, education, economic diversity)
• Exchange of students & ideas (Korea – West)
• Economic conditions that can support entrepreneurship
Startup Ecosystem
Reasons for Growth
Entrepreneurship in Kore has never been this hot. Korean founders are passionate, talented and building companies that are having a real impact in the region, and across the world. While there is much still to achieve, the future looks very bright.
•Highest number of startups per capita in the world• China has highest number of startups of any country• USA has ‘the best’ startups
•Mostly consumer facing mobile services
•Gaming, E-commerce, social-powered platforms, Content
Startup Ecosystem
Startups
Hottest Startups
• Maturing platform situation (dominated by 1 – 2 players)
• Kakao–Daum merger could create super-company?
• Global competition (hardware, software, services)
• Opportunities in IoT & smart home
• Korean tech startups & SMEs more determined globally
• Korean consumers will lead global mobile trends
• Closer relationship with China
Today’s Trends
Keep in Touch
• Contact me for more information
• Nathan@besuccess.com / @Nathan_mill
• +82 (0)10 8723 7702
Thank You!!
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