Startup Enthusiasm Also 'Slows Down' During Investment Winter

Overall Startups from January to September This Year Decreased by 4.6% Compared to the Previous Year

[Asia Economy Reporter Kim Cheol-hyun] The 'investment winter' sweeping through the venture and startup industry has led to a slowdown in entrepreneurial enthusiasm. The number of startups through the third quarter of this year decreased by nearly 5% compared to the same period last year.

According to the 'Startup Business Trends' announced on the 30th by the Ministry of SMEs and Startups (Minister Lee Young), the total number of startups from January to September this year was counted at 1,019,397. This represents a decrease of 49,601, or 4.6%, compared to the same period last year. However, the Ministry explained that excluding the real estate sector, which saw a surge in business registrations since 2020, actual startups increased by 1.9%.

It is notable that technology-based startups (hereafter referred to as technology startups), which include many startups, have decreased. They were counted at 176,279, down 2.4% (4,328) compared to last year. While the lifting of social distancing measures led to a 22.3% increase in creative, arts, and leisure businesses compared to the previous year, the growth in information and communication businesses slowed, and startups in professional, scientific, and technical services decreased by 6.7% compared to the previous year.

The real estate sector recorded a 27.3% decline this period, following a 35.5% decrease last year, due to the base effect from the surge in startups in 2020. The accommodation and food service sector also decreased by 4.7% compared to the same period last year. The sectors that saw an increase in startups were wholesale and retail trade, boosted by the activation of online shopping, which rose by 8.1% year-on-year. Personal services also increased by 0.5%, influenced by the full lifting of social distancing measures.

Looking at startup trends by age group, startups in the real estate sector decreased by more than 25% across all age groups, resulting in a decline in startups in all age groups except those in their 30s. The increase in startups among those in their 30s was only 0.5%. Technology startups also decreased in all age groups except those in their 30s. By organizational form, corporate startups decreased by 4.9% (4,588) compared to the same period last year, and individual startups decreased by 4.6% (45,013). Even excluding the real estate sector, corporate startups decreased by 4.6% (3,701) year-on-year.

By gender, female startups decreased by 6.0% (29,847) to 468,848, while male startups decreased by 3.5% (20,138) to 549,531 compared to the same period last year. Regionally, startups decreased in 13 areas including the Seoul metropolitan area?Seoul (8.1%), Gyeonggi (6.2%), Incheon (6.1%)?and Busan (8.5%). Only four regions showed an increase: Chungnam (6.9%), Gangwon (4.9%), Chungbuk (0.7%), and Gyeongbuk (0.3%).