'K-Unicorn' Creates Over 6,700 Jobs... Sales Also Up 50%

[Asia Economy Reporter Donghyun Choi] The 'K-Unicorn' program supported by the Ministry of SMEs and Startups has shown clear employment effects, creating over 6,700 new jobs in just one year and eight months.

The Ministry of SMEs and Startups announced the achievements of companies participating in the 'K-Unicorn Project' on the 27th. This government initiative, launched in April 2020, helps promising startups and venture companies that have passed market validation such as investment attraction to grow into unicorn companies.

In the first phase, market pioneering funds of up to 300 million KRW are provided to "Baby Unicorns," companies with a valuation under 100 billion KRW. In the second phase, special guarantees of up to 10 billion KRW are offered to "Pre-Unicorns," companies valued between 100 billion and 1 trillion KRW. As of the end of last year, 100 Baby Unicorns and 76 Pre-Unicorns had been selected.

Analysis of the performance of companies selected as Baby Unicorns and Pre-Unicorns showed that many companies achieved positive outcomes such as job expansion and follow-up investment attraction after participation. As of the end of 2021, the number of jobs at 100 Baby Unicorns increased by 55.6% from the application time, totaling 1,920 jobs (19.2 jobs per company). During the same period, the 76 Pre-Unicorns saw a 59.8% increase in jobs, reaching 4,819 jobs (63.4 jobs per company).

The companies with the highest employment growth were Curly and Uisikju Company, selected as Baby Unicorns in 2019 and 2020 respectively. Curly increased employment by 2,228 people in about one year and eight months, showing a growth rate of 631.2%. Uisikju Company also recorded a 363% increase in employment.

Among 27 companies that were Pre-Unicorns in 2019, sales increased sharply, expanding by about 50% for two consecutive years. Despite operating losses at the time of selection, some companies turned profitable after participating in the K-Unicorn Project. Ridi, a 2019 Pre-Unicorn participant, posted an operating loss of 5.6 billion KRW at the end of that year but turned a profit of 4.4 billion KRW in 2020, showing the largest increase in operating profit among such cases.

The investment inducement effect was also significant. The companies that attracted the most follow-up investments were Pre-Unicorn Curly and Baby Unicorn Biomixtech. Curly, selected as a Pre-Unicorn in 2019, was recognized as a unicorn company with a valuation exceeding 1 trillion KRW through investment attraction in July 2021. In December 2021, it secured an additional 250 billion KRW investment from the Hong Kong-based private equity firm Anchor Equity Partners. Biomixtech, a plant-based alternative meat startup and a 2021 Baby Unicorn, attracted 20 billion KRW in investment from Kiwoom Private Equity and others in October 2021.

Some companies also succeeded in exit through IPOs and M&As. Zigbang was valued at about 1.1 trillion KRW through secondary share transactions in June last year. Curly attracted 225.4 billion KRW in investment in July last year, raising its valuation to about 2.5 trillion KRW and becoming a unicorn. Five participating companies were listed on the KOSDAQ market. Croquis.com was acquired by Kakao in April last year.

Based on these achievements, the Ministry of SMEs and Startups plans to further strengthen the K-Unicorn Project this year. The Baby Unicorn nurturing program will expand support to 100 companies, up from 60 last year. Twenty-four Pre-Unicorns will be selected. For selected companies, the guarantee limit per company will be increased from 10 billion KRW to 20 billion KRW to facilitate large-scale fundraising for unicorn growth.

Park Sang-yong, head of the Venture Innovation Policy Division at the Ministry of SMEs and Startups, said, "Despite the spread of COVID-19, the 'Second Venture Boom' has taken root, increasing the number of innovative companies such as startups, ventures, and unicorns. We will vigorously promote K-Unicorn this year as well, making it a driving force for our economy to move from a follower economy to a leading economy."