The Startup Market's 'Okseokgarigi' Has Begun

Unicorn Company IPOs Postponed One After Another
IT Developer Recruitment Competition Slows Down
Content, Novels, Healthcare, etc.
Only Bright Prospects or Leading Companies Receive Investment

Visitors attending 'NextRise 2022' held at COEX in Gangnam-gu, Seoul, are listening to explanations related to startups.

[Asia Economy Reporter Donghyun Choi] As the domestic startup investment market freezes, the initial public offering (IPO) schedules of major domestic ‘unicorn’ companies are being postponed indefinitely. Changes are also being observed in the soaring developer salaries. The industry sees this as the beginning of a serious sorting process.

Online fashion platform Musinsa initially planned to select an underwriter in the second half of this year and proceed with an IPO as early as the first half of next year, but due to market conditions, it has decided to reconsider the IPO schedule for after next year. The listing schedule of Toss, which was expected to go public next year, has also been effectively postponed indefinitely.

The competition to recruit IT developers, whose salaries had grown to several hundred million won, is also slowing down. A CEO of a domestic startup related to job training said, "We have stopped aggressive hiring such as granting large amounts of stock options and plan to monitor the situation for a while and conduct large-scale hiring when the developer salary bubble bursts." He added, "The enthusiasm to join major IT companies such as Naver, Kakao, Line, Coupang, and Baedal Minjok (referred to as Nekarakuba) has also significantly declined compared to the past."

As investment scales shrink, there is also a tendency to invest only in promising fields or companies leading the market. According to Startup Alliance, the sectors with the highest number of single investments last month were ‘Content & Novels’ and ‘Healthcare,’ each attracting 15 investments. In the ‘Content & Novels’ sector, WhyNot Media completed a Series C funding round worth 22 billion won, recording the highest investment amount. Founded in 2016, WhyNot Media produces ‘short-form content,’ which are short videos around 10 minutes long, optimized for mobile viewing environments.

In ‘Healthcare,’ Airs Medical, which developed digital diagnostic tests using artificial intelligence (AI) and robotics technology, attracted 25.3 billion won in Series B investment, ranking first. Airs Medical is a startup founded in 2018 by co-founders from Seoul National University’s Department of Electrical and Computer Engineering and Medical School.

Imo, CEO of a startup related to pregnancy and childcare, said, "Recently, an investor who was investing simultaneously in two companies, including ours, decided to drop one and focus solely on us." He stated that his company was not ignored by investors because it holds the number one market share and its sales are steadily growing, and he expects this trend to continue further.

Meanwhile, according to the ‘Venture Investment Trends for the First Half of 2022’ recently announced by the Ministry of SMEs and Startups, venture investment in the first quarter of this year exceeded 2 trillion won for the first time, reaching 2.1802 trillion won. However, in the second quarter, it decreased by 79.4 billion won (4.2%) year-on-year to 1.8259 trillion won. This quarterly decline in investment amount is the first in eight quarters since the second quarter of 2020.