"300,000 SMEs Face Succession Crisis... Entrepreneurship Through Acquisition Offers a Solution"

Many SMEs Face Closure Without Successors Amid Aging Population and Youth Unemployment
DeepSearch Proposes ETA as a New Solution Through Industry-Government-Academia Collaboration
AI-Based M&A Platform 'Listing' Lowers Entry Barriers for Regiona

Amid the triple challenges of an aging population, the decline of local economies, and youth unemployment, a significant number of small and medium-sized enterprises (SMEs) are at risk of disappearing without successors. In response, DeepSearch has proposed a new breakthrough called 'Entrepreneurship Through Acquisition (ETA),' a product of collaboration among the private sector, government, industry, and academia.

At a press conference held on the 29th at Front1 in Mapo-gu, Seoul, Kim Jaeyoon, CEO of DeepSearch, stated, "Four out of ten SMEs are currently run by owners aged 60 or older. Over the next decade, 300,000 companies face the risk of extinction, which could result in revenue losses amounting to 800 trillion won."

Kim Jaeyoon, CEO of DeepSearch, is explaining the Korean-style ETA program at a press conference held on the 29th at Front1 in Mapo-gu, Seoul. Photo by Lee Sungmin

He went on to emphasize, "With the youth unemployment rate exceeding 17%, Entrepreneurship Through Acquisition will connect endangered companies with new owners and open a path to entrepreneurship for young people, one with a lower probability of failure."

Entrepreneurship Through Acquisition is not simply about starting a business based on an idea; it involves acquiring already established and validated companies, thereby reducing risk and increasing growth potential. Kim explained, "While seven out of ten idea-based startups disappear within five years, Entrepreneurship Through Acquisition starts with companies that have stable cash flows, resulting in a much higher survival rate."

The core tool of this program is 'Listing,' an artificial intelligence (AI)-based mergers and acquisitions (M&A) platform. The traditional M&A market has been dominated by large corporations and accounting firms, resulting in high costs and making it difficult for local SMEs to participate. However, by automating deal sourcing, valuation, and buyer matching through AI, the platform has significantly lowered the barriers to entry.

The program also addresses funding challenges. DeepSearch and its partner organizations have prepared four types of financial programs: bank loans, a 50 billion won fund, private investment associations, and government guarantees. If an entrepreneur can secure 30% of the required capital, the remaining amount can be financed through external sources.

Kim stated, "A factory on the brink of closure can be reborn as an AI and IT-driven innovative company in the hands of a new entrepreneur. Entrepreneurship Through Acquisition is a national solution that addresses both local economic revitalization and youth employment issues."

On the same day, DeepSearch, the Gyeongbuk Center for Creative Economy & Innovation, Kumoh National Institute of Technology, and Story & Data officially launched the 'Korean-style ETA Program' and signed a memorandum of understanding (MOU) for collaboration. The program will begin as a pilot in the Gyeongbuk region in September and is expected to expand nationwide.

Yoo Juhyun, CEO of the Gyeongbuk Center for Creative Economy & Innovation, said, "This collaboration will mark an important turning point by expanding the paradigm of startup support, which has been concentrated in the Seoul metropolitan area, to local regions and rediscovering hidden gem companies. We will spare no effort to ensure that the ETA program becomes a successful model for revitalizing local economies and achieving balanced national development."