[Viewpoint] 2021 Startup Stock Price Outlook

The stock market has continued its stormy rise this year. While the KOSDAQ market has been temporarily sideways, it has surged past 3000 points in a relentless advance. Last year, our stock market recorded the highest stock price increase rate compared to major countries, making it the hottest year since the introduction of the stock market. The amount raised through KOSDAQ last year was 2.1 trillion won, and through the KOSPI market it was around 2 trillion won, showing about a 20% growth rate compared to the previous year.

The global liquidity expansion has been the biggest driving force behind the stock market growth. Countries have absorbed fiscal deficits by distributing massive amounts of disaster relief funds to recover economies depressed by COVID-19, and Korea also supplied a huge amount of funds to the market through three supplementary budgets. Korea performed relatively well in various sectors compared to major countries due to 'K-quarantine' and the cooperation of its citizens, which led to stock price increases. The so-called 'debt investment' and 'all-in investment' by Donghak Ants also had an impact.

At the beginning of 2020, I predicted visible results in the startup sector such as increased sales, job creation, and profit growth, which would lead to an increase in unicorn companies and global M&A activity. Due to COVID-19, seven unicorn companies were added globally, and global M&A increased significantly. So, what about startup stock prices this year? Several factors are expected to have a positive impact on the KOSDAQ market.

First, the fact that many domestic unicorn companies are preparing for IPOs will act as a positive factor for stock price increases. According to the Ministry of SMEs and Startups, among 13 domestic unicorn companies, seven are pursuing domestic and overseas listings this year. Leading the pack is Coupang, which is pursuing a NASDAQ listing, followed by Krafton, Viva Republica (Toss), Yanolja, Socar, Ticket Monster, and GP Club preparing for IPOs. Four companies including Yanolja have already selected their lead underwriters. The successive IPO attempts by domestic unicorn companies are related to the increased valuation of unicorn companies leading the advanced industries in the market after the COVID-19 pandemic. Last year, companies such as Palantir and Snowflake in the U.S., and domestic companies like SK Biopharm and Kakao Games saw their corporate values rise significantly after listing.

Second, although not unicorns, about 80 to 100 startups with excellent sales and profits are preparing for KOSDAQ listings this year as well. Over the past five years, an average of 84 companies per year, and 86 companies last year, were listed on KOSDAQ. Led by NBT, about 30 companies are preparing for KOSDAQ listings in the first quarter alone, with Finger, C-Lab, CNTOOS Seongjin, and Sunjin Beauty Science already conducting demand forecasting targeting institutional investors.

Third, the relative high performance of our companies is expected. After overcoming COVID-19, demand for advanced technology products including semiconductors is expected to surge during the economic recovery period, and our companies are expected to benefit greatly from this. These factors are projected to drive the rise of the KOSDAQ market this year. / Kim Kyunghwan, Dean of the Graduate School of Global Entrepreneurship, Sungkyunkwan University