South Korea aims to create a sustainable ecosystem for startup accelerators
In order to lay the foundation for the birth of unicorns, South Korea is looking to create a “sustainable ecosystem” that can support and nurture influential startup accelerators, according to the new president of the Korea Accelerator Association (KAA). Jeon Hwaseong, the founder and CEO of Korean accelerator CNTTECH Co., believes that the country needs to take inspiration from successful accelerators like Techstars and Y Combinator in the US. Jeon highlights the important role that accelerators play in educating, advising, and investing in very early-stage startups. He hopes that Korean accelerators can lead the way in discovering and investing in growth-driven startups.
The need for more active and influential accelerators in Korea
Currently, Korea has about 450 officially registered accelerators, but only 80 to 90 of them are active in discovering and investing in promising startups. Jeon believes that there needs to be more active and influential accelerators in order to create a sustainable ecosystem that can nurture the country’s next unicorn. He plans to open a startup center near Seoul, where startups can receive mentorship and financial support. These initiatives will help create a stronger support system for local startups and provide them with the necessary resources to turn their ideas into successful businesses.
More private sector-driven funds of funds needed
Jeon emphasizes the importance of establishing more private sector-driven funds of funds in addition to public funds of funds. These private funds will provide startups with the funding they need to survive and thrive, especially during difficult economic times. By combining both public and private funds, Korean accelerators can better support startups and help them navigate the challenges of securing funding. Jeon hopes that under his leadership, the KAA can go global and mentor foreign startups, as well as facilitate offshore investments for Korean startups.
The ambition to mentor overseas startups and go public in the Kosdaq market
Jeon envisions a future where the KAA can discover an overseas startup, bring it to Korea, and mentor it to the point where it can go public in the Kosdaq market. This would be a significant milestone for Korean accelerators as none have succeeded in going public yet. Jeon believes that by expanding the reach of Korean accelerators and fostering international collaborations, the KAA can create opportunities for Korean startups to access offshore investments and grow their businesses on a global scale.
The KAA prepares for its first initial public offering of an accelerator
In a move to drive further growth and visibility, the KAA is preparing to list a special-purpose acquisition company (SPAC) for the country’s first accelerator initial public offering (IPO). This IPO will be a significant step forward for Korean accelerators, paving the way for more startups to seek public funding and attention. Despite previous attempts, no Korean accelerators have successfully gone public yet, making this upcoming IPO an important milestone for the industry. The KAA is hopeful that the IPO will attract more attention and support for the country’s startup ecosystem.
Analyst comment
Positive news. The creation of a sustainable ecosystem for startup accelerators in South Korea will lead to increased support and investment in promising startups, potentially resulting in the emergence of unicorns. The plan includes the establishment of a startup center, private sector-driven funds of funds, mentorship for foreign startups, and the first accelerator IPO in Korea. These initiatives aim to strengthen the support system for local startups and attract offshore investments, facilitating the growth of Korean businesses on a global scale.
