The domestic venture investment market is showing signs of recovery. After five consecutive months of decline until May this year, the scale of venture investment rebounded last month. In particular, with the Lee Jae-myung administration demonstrating its commitment to fostering the artificial intelligence industry, investments in the AI and deep tech sectors increased threefold compared to the previous month.
According to a report by ChosunBiz, which compiled data with the startup analysis platform “InnoForest” on the 10th, about 467.9 billion won in new investments were made last month. This represents a 6.1% increase compared to the same period last year (441.1 billion won), with the number of startups securing investments rising from 77 to 85 during the same period.
The data reflects the new investments made by domestic venture capital (VC) firms and institutional investors, which included seed stage investments up to pre-initial public offering (pre-IPO) funding in June. In May, approximately 220.5 billion won was invested in 58 startups, nearly doubling the investment amount.
This year, the venture investment market has continued to face a downturn. In particular, the investment has been curtailed due to economic recession and difficulties in recovering investment funds worsened by higher thresholds for public offerings, raising concerns that the market is entering a prolonged cold wave. Until May, there was a consecutive decline in investment amounts compared to the previous year for five months.
Expectations for the new government’s policies have created a favorable environment for the venture investment market. President Lee Jae-myung, during his campaign, already touted ‘becoming a leading economic powerhouse in the world’ as his first pledge, which included objectives such as ‘leaping to a top three position in AI through an AI transformation’ and ‘realizing a venture powerhouse by fostering the venture investment market.’
Recently, the government also introduced the ‘Korea AI National Strategy 3.0,’ an execution plan aimed at realizing Korea as one of the top three AI powerhouses in the world. The core elements include ’100 trillion won investment in AI,' ‘expanding AI across industry, public sectors, and everyday life,’ and ‘AI New Deal for regional balance and inclusiveness.’ Thus, AI has been positioned at the forefront of the government-led industrial growth policies.
Venture capitalists have already started seeking promising AI technology venture firms. This appears to have led to overall revitalization in the venture investment market. In fact, investment for the AI and deep tech sectors reached 30.2 billion won last month, significantly increasing threefold compared to 10.2 billion won in the previous month.
The top five companies in terms of fundraising last month were identified as those prioritizing AI as their core business model. Notable examples include ‘AimedBio,’ a corporation specializing in the development of antibodies and new drugs for brain diseases based on big data and AI (51.1 billion won), and ‘Colosseum Corporation,’ which provides AI-based fulfillment services.
Investment in the pharmaceutical and biotech sectors also appears to be reviving. Last month, 167.6 billion won was focused on pharmaceutical and biotech venture firms, making them the top category in terms of investment. Increased investments in biotech firms like AimedBio and the recovery of stock prices for recently listed biotech companies have also contributed positively.
The operators of InnoForest noted, ‘There was a simultaneous increase in investments across multiple technology-centric sectors last month,’ adding that ‘rather than a one-time rebound, this reflects a recovery of trust in technology-based startups, influx of policy funding, and changes in industrial structure.’
Meanwhile, the venture capital firm that executed the most investments last month was identified as The Invention Lab. The Invention Lab was found to have invested in four companies, including ‘Tesollo,’ ‘Bistool,’ ‘Motion Labs,’ and ‘Petbom.’ Following them, POSCO Ventures also invested in two companies, ‘Tesollo’ and ‘Framto.’