[2023 National Audit] 111 Pre-Unicorns Selected... But Only 6 Show Growth

Concerns have been raised in the National Assembly that so-called 'pre-unicorn' companies, which have a high potential to grow into 'unicorn' startups valued at over 1 trillion won, may be eliminated due to the government's failure to nurture them.

According to data received on the 27th by Yang Hyang-ja, a member of the National Assembly's Industry, Trade, Energy, Small and Medium Enterprises and Startups Committee from the Ministry of SMEs and Startups, out of 111 companies selected as pre-unicorns over five years, only six have grown into unicorns.

The Ministry of SMEs and Startups' Pre-Unicorn Special Guarantee program designates companies with high potential to become unicorns as pre-unicorns and provides loans up to 20 billion won. Yang pointed out that pre-unicorn companies, which sprouted from government investment, have stopped growing due to a lack of follow-up investment.

In 2019 alone, each pre-unicorn company attracted about 95 billion won in follow-up investment, but last year, this amount dropped by 82% to about 17 billion won over four years. As a result, last year, among 96 pre-unicorns, 25% (24 companies) saw a reduction in employees, and 21% (20 companies) experienced a decrease in sales.

Representative Yang said, "Pre-unicorns must cross the 'death valley' to become unicorn companies," adding, "The government should carefully consider the growth cycle of pre-unicorns and establish a systematic nurturing plan to ensure continuous follow-up investment."