Despite increased contribution from the private sector, Korean startups and venture enterprises still rely heavily on government funding, data showed Monday.
According to a report released by the Ministry of SMEs and Startups and Korea Venture Business Association, 65.8 percent of fundraising by the nation’s 36,065 startups was made with the government supports as of the end of 2018, slightly up from 60.5 percent in 2017. The companies raised 25.4 percent of the funds from financial institutions, 2.4 percent from venture capital and angel investments, 0.9 percent from corporate debt offering, 0.2 percent from initial public offering (IPO) and 5.2 percent from other sources.
Still, the share of financing through venture capitalists and angel investors gained 2.4 percent last year, sharply up from marginal rises of 0.1 percent in 2015, 0.4 percent in 2016 and 0.7 percent in 2017.
“Startups have been heavily depending on state supports for many years, but it is promising to see increased funding from venture and angel capital,” an official from the startup ministry said.
The data also found that the number of venture companies rose 2.5 percent from 35,187 in 2017 to 36,065 at the end of 2018. Their combined sales totaled 192 trillion won, meaning that one startup generated 5.32 billion won in revenue on average in 2018, up 7.9 percent from a year ago.
The startups have 715,000 employees on their payroll as of late 2018, higher than 668,000 employees hired by the nation’s top four conglomerates.
By Lee Duk-joo and Choi Mira
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]