'K-Pop Startup' Investment Draws Funds Despite Investment Winter
MakeStar, BeMyFriends, K-Town4U Show Results
A wave of innovation from startups is sweeping through the K-pop market. When it comes to K-pop-related companies, people usually think of large entertainment agencies. However, startups are actively leading digitalization based on technology at various touchpoints where K-pop stars and fans meet. The market outlook is also bright. Even during last year, which was an off-season for investments, startups engaged in K-pop-related businesses attracted nearly 170 billion KRW in funding.
On the 26th, The VC, a startup investment information platform, announced that from last year through January of this year, a total of 53 investments were made in startups related to K-pop entertainment and music content sectors. The disclosed investment amount was 166.85 billion KRW. Notably, although overall startup investments decreased last year, investments in this sector continued steadily every month.
By sector, startups in the celebrity field, which can be considered the face of the K-pop market, received the most investments with 16 deals. This covers the entire fan platform business surrounding K-pop stars. The disclosed investment amount was also the highest at 60.4 billion KRW. Following that, the exhibition/performance and music content sectors each had 12 deals. The investment amount in the exhibition/performance sector was 13.75 billion KRW, and 46.9 billion KRW was invested in the music content sector during the same period.
A representative startup in this market is Ktown4u, a K-pop commerce platform. It successfully raised 50 billion KRW in investment last year. The investors include LB Investment, KB Securities, and SJ Investment Partners. Its business model connects 5,200 K-pop fan clubs worldwide with shopping malls. Revoist, a startup operating the K-pop platform WeX, also made headlines last year by securing seed investment from Jim Rogers, chairman of Rogers Holdings. WeX is a platform that invests in K-pop music rights. Fans or individual investors can purchase neighboring rights to participate in the production of new songs by artists.
Startups are also turning K-pop stars’ fandom culture into business. SpaceOddity, which raised 4 billion KRW in Series A funding last year, offers a fandom-exclusive mobile app. It also provides a dashboard that shows real-time K-pop fandom status. There is also BeMyFriends, which provides solutions for K-pop stars to communicate with fans and generate revenue. It raised a total of 22.4 billion KRW in investments last year from CJ and others, gaining recognition for its growth potential. Lee Ki-young, co-CEO of BeMyFriends, said, "Fandom business starts where fans gather. It is important for the business operators and fandom to communicate closely and form genuine relationships."
Results are also materializing. Ktown4u’s sales rapidly grew from around 13 billion KRW in 2016 to 200 billion KRW last year. Its membership also surpassed 4 million. Makestar’s sales increased from 29.7 billion KRW in 2021 to 47.9 billion KRW last year. Makestar is a startup operating an entertainment platform that connects domestic content creators with fans worldwide.
As investment funds accumulate and results emerge, the scope of activities for startups engaged in K-pop business is expected to expand. This is because global demand remains strong despite the recession. Kim Jae-myeon, CEO of Makestar, said, "This year, we will expand our business areas beyond K-pop to actors and dramas, contributing to the global spread of K-culture."
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