K-Unicorn Participating Companies, Sales Increase by Over 50%

Job Creation Alongside Investment Attraction and Sales Growth

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[Asia Economy Reporter Kim Cheol-hyun] Despite the spread of the novel coronavirus disease (COVID-19) this year, the "Second Venture Boom" has fully gained momentum, and government projects to promote the birth of "K-Unicorns" are expected to expand next year as well.

On the 28th, the Ministry of SMEs and Startups (Minister Park Young-sun, hereinafter referred to as the Ministry) announced the achievements and best cases of this year, as well as the changes for 2021, to help promising domestic startups and venture companies aiming to grow into unicorn companies (unlisted companies valued at over 1 trillion KRW and attracting venture investment) easily participate in the "K-Unicorn Project."

The K-Unicorn Project is a government initiative launched in April this year to support promising startups and venture companies that have undergone market validation such as investment attraction to grow into unicorn companies. According to the Ministry's analysis of the achievements of companies that participated in the K-Unicorn Project, including Baby Unicorn 200 and Preliminary Unicorn Special Guarantee, many companies have shown good results such as attracting follow-up investments and expanding jobs after participation. Some companies also achieved outcomes such as initial public offerings (IPO) and awards at overseas startup competitions.

◆ 670.9 billion KRW Follow-up Investment Attraction = Among the 40 companies participating in the 2020 Baby Unicorn 200, 14 companies attracted 102.1 billion KRW in follow-up investments within six months, and among the 42 companies participating in the 2019-2020 1st Preliminary Unicorn Special Guarantee, 21 companies attracted 568.8 billion KRW in follow-up investments, totaling 670.9 billion KRW in additional venture investments, exceeding 50% of the initial investment amount. Notably, Engen Bio and Hana Technology, selected for the 2019 Preliminary Unicorn Special Guarantee, succeeded in going public by listing on the KOSDAQ market this year.

The sales of participating companies have also shown significant improvement. Companies (27 firms) supported by the 2019 Preliminary Unicorn Special Guarantee saw their average sales increase by about 50% for two consecutive years, showing a remarkable sales growth trend. Companies participating in the 2020 Baby Unicorn 200 and Preliminary Unicorn Special Guarantee also recorded sales increases of 172% and 73.7%, respectively, compared to the same period last year.

Companies participating in the K-Unicorn Project also increased jobs during their growth process. Baby Unicorn 200 companies increased an average of 11 jobs per company, totaling 449 jobs (a 26.9% increase) within six months, and Preliminary Unicorn Special Guarantee companies created a total of 1,449 new jobs compared to the time of application. Additionally, participating companies received international recognition, such as winning the 2020 CES Innovation Award (DS Global) and achieving five awards at overseas startup competitions (SensStone).

◆ Expansion of the K-Unicorn Project in 2021 = Accordingly, the 2021 Baby Unicorn 200 nurturing project will expand its support to 60 companies, up from 40 companies this year. With the establishment of the "Jump-up Fund" to help Preliminary Unicorns leap to unicorn companies, nine venture funds in new industries, mergers and acquisitions (M&A), and large-scale investments (scale-up) will begin full-scale investments starting next year. Domestic and international non-face-to-face investor relations (IR) sessions with K-Unicorn supporters will also be held from March next year.

The institutional foundation will continue to improve. First, the amendment to the Venture Business Act allowing multiple voting rights stocks for unlisted venture companies is expected to pass in 2021, with active consultations gathering opinions from the National Assembly, industry, and civic groups. The Venture Investment Act will also be amended to allow venture funds to establish special purpose companies (SPCs) to obtain loans for investment purposes. Separate preferential measures will be prepared so that non-face-to-face startups and venture companies can grow into global companies by utilizing the K-Unicorn Project.

Park Yong-soon, Director of Venture Innovation Policy at the Ministry, said, "Despite the spread of COVID-19 this year, the 'Second Venture Boom' has taken root, increasing the number of innovative companies such as startups, ventures, and unicorn companies, which are creating new jobs and emerging as new leaders in the stock market." He added, "Next year, we will vigorously promote the K-Unicorn Project to make innovative startups, ventures, and unicorn companies the driving force of our economic growth."