Everybody knows the famous song, Gangnam Style which swept the world back in 2012. Nowadays, Gangnam district is becoming a central startup hub for Korean startups. Expanding its global presence powered by innovation coming out from the area, the panels discussed how Korean startup ecosystem can it bring in synergy effect with China’s startups.
The three panels consisted of incubator (D.CAMP), investor (Capstone Partners) and entrepreneur (StudioXID), each not only are renown for its pioneering effort to contribute to the ecosystem in Korea, but has also long been established relationship with Chinese companies like Huawei, Foxconn and Tencent.
Innovation And Connectivity
With an LTE penetration ratio over 60%, one of the highest in the world, South Korea has high-speed internet and cutting-edge mobile infrastructures. “It is an optimal testbed for global startups as well as Chinese startups,” KH Kim said. “In the subway, you can easily observe Koreans watching TV dramas or professional baseball games on their LTE phones, without any buffering or cutting off.”
Based on these rich infrastructure, it was 2012, when 20 banks in Korea formed about half a billion dollars to support young entrepreneurs. It motivated an IT journalist KH Kim with almost 30 years of experience to join the one of the largest startup campuses in Seoul. “D.CAMP (Banks Foundation for Young Entrepreneur) was a pioneer to Korean startup ecosystem founded early in 2012,” said KH Kim, who now became Executive Director of D. CAMP. “We hold demo day every month, and more than 50 startup apply to pitch in front of venture capitals and angel investors. The hall can afford only about 150 people, but every time almost 200 people come to see the chosen five startups pitching.” KH Kim laughed.
Followed by D.CAMP, startups, angel investors and venture capitals flocked to the Gangnam area, which now became the hub of startups. During the last 15 months, startup supporting centers such as Maru 180, Startup Alliance, Google Campus Seoul opened and started supporting these startups.
The biggest change that Tony Kim sees is that startup manpower and ideology is changing. “Even a few years ago, if I said that I work in a startup, people would have regarded me as if I were a loser, that I’m not capable enough to utilize my talent to get stable job. But now, situations are changing.” Studio XID founder Tony Kim said, who previously worked at Google Beijing as a designer.
“Now well-educated people and those who worked in huge corporate like Samsung, LG or government agencies are leaving their jobs to start their own business. Consequently, there are a lot of startups nowadays that possess high technologies and mature business skills with a pool of experienced people.” Tony Kim added. Tony Kim’s team exemplifies this phenomena and embraces people with professional experience at Google, Naver and Samsung.
“Last year, a total of $1.5 billion US sized 900 deals were made, and the numbers are expected to reach over a total of $2 billion US, with more than 1,000 deals this year.” said Eunkang Song, founder and general partner of Capstone Partners LLC. “This possible growth projection is largely due to the President Park’s Creative Economy Plan.”
According to Song, the difference between China and Korea is that Korean startup ecosystem is largely driven by the government’s support. “One third of the money venture capitals have in their funds come from the government. In China, only 3% of startups use local or central government’s money, whereas in Korea, about 16% of startups utilize government subsidies when they first launch their businesses.” Song pointed out.
“In Korea, many things are driven by government. One good thing is the Korean government is offering many programs to fund expat entrepreneurs.” Tony Kim noted.
Partnerships between Chinese and Korean tech companies are growing fast. D.CAMP established partnership with Huawei and sponsored nine Korean startup delegation to come to TechCrunch Shanghai 2015. “D.CAMP and Chinese incubators can share working spaces and hold demo days together,” KH Kim remarked. “For example, Chinese startups looking to do business in Korea can stay in D.CAMP, and Korean startups looking to enter China can stay in Chinese incubator.”
Capstone Partners has long been with Tencent co-investing in gaming companies since 2010. “We are currently actively investing in the areas such as gaming, O2O, mobile education and IOT and are looking forward to seeing startups in fintech, data, science and AI in the near future.”
“We prioritized support to China’s popular platforms like Xiaomi and Huawei.” Tony remarked. He looks to help China’s corporate designers by providing them with coding-free prototyping tools. “In Google, we spent a lot time and resources on communication between designers and engineers,” Tony Kim noted. “ProtoPie helps designers to build interactive prototypes without programming skills.”
Image Credit: TechCrunch Shanghai 2015, L-R: Eva Yoo (Journalist of TechNode), KH Kim (Executive Director of D. CAMP), Eunkang Song (Founder and General Partner of Capstone Partners LLC), Tony Kim (CEO of Studio XID)