Venture Investment Companies Valued at 124 Trillion Won Over the Past 5 Years... KOSPI Ranks 2nd After Samsung Electronics

235 Pre-Unicorn Companies with Corporate Value Over 100 Billion KRW... 4.6 Times Increase Compared to 2015

[Asia Economy Reporter Kim Cheol-hyun] It has been analyzed that the corporate value of domestic venture investment-attracting companies over the past five years amounts to approximately 124 trillion KRW. This is the second largest scale after Samsung Electronics on the KOSPI. The number of prospective unicorn companies with a corporate value exceeding 100 billion KRW has also increased nearly fivefold compared to 2015.

The Ministry of SMEs and Startups (Minister Park Young-sun) and the Korea Venture Capital Association (Chairman Jung Sung-in) announced on the 7th the status of corporate values of domestic venture investment-attracting companies over the past five years. Corporate value has emerged as a concept highlighted in the process of unicorn companies leading the industrial ecosystem, and it is gaining attention as an indicator to understand the status of the domestic startup and venture ecosystem as well as the growth potential of invested companies. This corporate value analysis targeted 3,381 companies whose corporate values could be confirmed, excluding project investments and secondary stock investments, out of 4,613 companies that received investments from 2015 to 2019.

◆Total Corporate Value 124 Trillion KRW... Second Largest after Samsung Electronics = The total corporate value of 3,381 companies that received investments over the past five years was found to be 124.0772 trillion KRW. When compared indirectly, this corresponds to 59.1% of the total market capitalization of KOSDAQ, and compared to KOSPI, it ranks second after Samsung Electronics, more than twice that of SK Hynix. Compared to Celltrion Healthcare, the top market capitalization company on KOSDAQ, it is more than ten times higher.

Looking at corporate value categories, 235 companies (7% of the total) have a corporate value exceeding 100 billion KRW, 1,623 companies are between 10 billion and 100 billion KRW, and 1,523 companies are below 10 billion KRW. Notably, the number of prospective unicorn companies with a corporate value over 100 billion KRW increased 4.6 times from 51 in 2015 to 235 in 2019. By year, the number increased by 32 annually between 2016 and 2017, but from 2018, it rose by 43 and in 2019 by 77, showing an accelerating trend. This is analyzed to be due to venture funds created by large supplementary budgets for the Korea Fund of Funds in 2017 beginning full-scale investments from 2018, increasing investment amounts. Additionally, there are seven companies with a corporate value exceeding 1 trillion KRW, the standard for unicorn companies. Although there are 11 unicorn companies domestically, some are registered through overseas investments, so this analysis and figures do not exactly match.

◆Bio and Medical Fields Have the Highest Corporate Value = The average corporate value was highest in the bio and medical fields at 65.1 billion KRW, followed by games (45.1 billion KRW) and chemicals and materials (39.8 billion KRW). A high multiple of corporate value relative to investment amount indicates that investors highly recognize growth potential; the game sector had the highest multiple at 16.8 times, followed by chemicals and materials (12.9 times), distribution and services (11.4 times), and bio and medical (11.1 times).

Limiting to companies with a corporate value over 100 billion KRW (235 companies) by industry, the bio and medical field had the most with 71 companies (30.2%), followed by ICT services with 50, distribution and services with 35, and electrical, machinery, and equipment with 25. Among the Fourth Industrial Revolution fields, the 5G sector had the highest average corporate value at 67.2 billion KRW, followed by smart healthcare at 66.1 billion KRW. 5G showed not only the highest average corporate value but also the highest multiple relative to investment amount at 13.8 times, indicating investors recognized its growth potential.

Among Fourth Industrial Revolution fields, the sector with the highest multiple relative to investment amount in 2019 was cloud computing (20.6 times). The Fourth Industrial Revolution trends that investors are interested in changed annually. Looking at multiples relative to investment amount by year, blockchain was highest in 2017, 3D printing in 2018, and cloud computing in 2019. From 2017 to 2019, the sectors with increasing multiples relative to investment amount each year were autonomous vehicles, smart cities, cloud computing, intelligent robots, and AR/VR, five in total, while fintech and blockchain sectors showed a decline each year, indicating decreasing investor interest.

Looking at employment increase per 1 billion KRW invested, companies with a corporate value over 100 billion KRW (4.7 persons) showed better employment effects than those under 100 billion KRW (4 persons). However, companies in the initial stage with less than 10 billion KRW corporate value employed 5.2 persons per 1 billion KRW invested, actively utilizing investment funds for employment expansion. Minister Park Young-sun of the Ministry of SMEs and Startups stated, "This analysis is the first of its kind domestically and is very meaningful in accurately showing the status of the startup and venture ecosystem from the corporate value status of venture investment-attracting companies to investment trends," adding, "We will select and intensively nurture excellent startup companies to grow their corporate value to 100 billion KRW, and then supply sufficient funds from the investment market so that they can grow into unicorn companies by accelerating projects such as the K-Unicorn Project."