Where is the Metaverse Era Pickaxe and Jeans Company?

How will Korea’s technology trends change in 5 years? Although we do not know the correct answer, Hankyung Giggs tries to find the expected answer through ’16 formulas of successful startups in Series A’. Based on the data of the startup information company The VC, a total of 418 startups (excluding 58 companies with undisclosed investment amounts) that received initial Series A investment from venture capital (VC) over the past year (April 2021 to March 2022) is the result of analysis. In Part 1, ‘Blood Battle of the e-Commerce Market’, we looked at the conditions for platforms and brands to survive. In this second part, we looked at the rising stars of the ICT industry who are preparing for the metaverse era.

The 153 ICT service sectors that have conducted Series A rounds over the past year have been broken down by service sector. 22.3% (274.1 billion won) of the investment in the ICT service industry (1.23 trillion won) was concentrated on enterprise software and logistics automation solutions. Next, investments continued in software solutions in the fields of automobiles (220 billion won), finance/real estate (207.1 billion won), and contents/entertainment (166.5 billion won).

The key word that penetrates these ICT services is artificial intelligence (AI). As machine learning and AI technologies that analyze big data accumulated during the development of PC → Internet → mobile mature, start-ups that realize commercialization in the real world are emerging one after another.

Ki-Joon Kim, vice president of Kakao Ventures, who has invested in deep-tech startups for over 10 years, summarizes the trends in AI technology development as follows.

Machine learning and AI technologies have advanced thanks to the accumulation of vast amounts of data through the PC, Internet, and mobile eras. Currently, we are focusing on AR (augmented reality), drones, autonomous driving, and robotics that apply these AI technologies to the real world. What’s next? It will be a metaverse technology featuring ‘Samantha’ and ‘Jarvis’.

#8 Growing Fan-tech Market

If you look at the flow of VC funds flowing into startups, it is clear that the scope of intellectual property (IP) is expanding to characters and fandoms. There are various names for creator economy, fan tech, and fandom business.

It is the era where character IP becomes money. Galaxy Corporation, a management company specializing in celebrities’ ‘additional characters’, raised an investment of 12.2 billion won in the Series A round in September last year. Character entertainment studio Origin received 5 billion won in funding. Founded by former Kakao Friends CEO Jo Hang-soo, this company develops and designs character IP brands.

B My Friends, founded by key members of Weverse, the ‘original’ fandom business platform, attracted an investment of 8 billion won in January. I am advocating for my own platform that is the only one in the world. We support creators to directly communicate with fans, strengthen their fandom, sell digital content, and build cross-border e-commerce such as ‘direct purchase’ and ‘reverse direct purchase’ in a personalized way. In the future, non-fungible token (NFT) technology will be introduced. We plan to open a content showcase on each creator’s platform and allow them to be exchanged and traded.

Hanteo Global, which operates the real-time music chart ‘Hanteo Chart’, has secured 6.4 million global subscribers within one year of the launch of ‘Whosfan’, a K-pop fan community app. Hanteo Global received a strategic investment worth 5 billion won from Silicon 2 in March.

Fantech companies such as 3D avatar-based fandom activity community platform Stan World Korea (3.5 billion won) and Panda, a fan membership platform for content creators (2 billion won) also attracted investment one after another.

#9 3% of Blockchain Technology Companies Picked

About 3% of the Series A investment in the past year has flowed into blockchain companies. Thirteen startups were listed as startups using blockchain technology. They are companies in the fields of blockchain infrastructure, games, sculpture investment platforms, virtual asset exchanges, and digital art NFTs.

It is clear that the biggest topic in the VC industry is blockchain, but many VCs are cautious about full-scale investment. This is because there are not many places that have secured high technology. Hak-beom Kim, CEO of Company K, said, “Just as many companies disappeared after the dot-com bubble in the early 2000s, we don’t know where blockchain companies will survive today.”

In the VC industry Cryptocurrency → Exchange → Currency Exchange → Credit → Virtualization → Asset ManagementIt is expected that the blockchain investment ecosystem will gradually expand.

The places that have received Series A investment in the past year are more than coin-related companies. Blockchain infrastructure technology companyThere are many. Block Odyssey, which develops a distribution management system using blockchain-based QR codes, attracted 35.8 billion won, the highest investment in the blockchain field, in March. In ‘SCANUS’, you can track the purchase process from product production to a simple scan of a QR code. As it is a service in the logistics and distribution field, large corporations such as SK Networks and KT&G have also stepped forward as strategic investors (SI).

Logistics automation is an area where digital transformation is accelerating after the coronavirus. Kakao Enterprise also officially launched Kakao i LaaS (Logistics as a Service) on May 3. It is a logistics ecosystem platform that connects freight companies (shippers) and logistics centers (member companies) based on AI and helps them to easily manage sales, orders, and warehouses.

PyLab Technology (a smart contract middleware platform for DApps and blockchain protocols) and Hexlant (blockchain technology application middleware) have attracted 10 billion won and 6.5 billion won of investment, respectively, this year.

The most actively expanding blockchain investment infrastructureDSRV Labs is listed as The company provides a staking service that allows companies to easily participate in a proof-of-stake network. In April, the company acquired Konst, which developed the digital asset management platform ‘Clink’.

DSRV Labs attracted attention with Naver’s investment. In June of last year, Samsung Electronics received a series A investment worth 3 billion won from Samsung Next and KB Investment, CVCs under Samsung Electronics.

Suho Io, a smart contract development engine company for cross-blockchain app development, has raised 5 billion won from Wemade Tree. In addition, cryptocurrency exchanges PlutosDS and Streamy also attracted investment.

#10 P2E ‧ NFT ‧ piece investment instead of coins

Even before the Luna/Tera crash, there were skeptics about cryptocurrencies and coins within the VC industry. This is why games using blockchain technology as an alternative to coins are getting attention. Park Ki-ho, CEO of LB Investment, explains, “P2E (a game to make money) is a more substantial investment target than coins.”

Invested by game company Wemade, Mirae Asset Venture Investment, and Kakao Ventures Like a cool lion (hereafter, cool) is a case of successful conversion from coding education to a P2E non-fungible asset (NFT) game company. Lycraion, a subsidiary founded by CEO Lee Doo-hee, has developed ‘Thread’, a P2E NFT card game based on Kakao’s public blockchain platform ‘Klaytn’. Thread skein is a total trading card game (TCG) in which users compete with each other by composing a deck with a total of 5 SYL cards. Fashionable NFTs are created by themselves and are making high IP profits.

As blockchain technology advances, the NFT art market is also growing. Game company Krafton invested 5 billion won in XbyBlue, an NFT art platform, in February. XbyBlue is a subsidiary of Seoul Auction Blue, which operates the art sculpture investment platform ‘Sotoo’. Led by Lee Jung-bong, the second son of the founder of Seoul Auction, XbyBlue is preparing for the overseas expansion of domestic NFTs.

Recently, MZ (Millennials + Generation Z) has been gaining popularity. piece investment platformIt is also utilizing blockchain technology to keep investor (holder) records. Lucent Block, a blockchain-based real estate beneficiary certificate distribution platform, and Funble, a commercial real estate indirect investment brokerage platform, attracted 17 billion won and 5 billion won, respectively, this year.

Yulyeol Company, which operates ‘Art & Guide’, an art sculpture investment platform, received an investment of 9.2 billion won from Softbank Ventures and Wemade Tree in October of last year. Another art sculpture investment platform, tesa, in December last year attracted 4 billion won in investment from Naver-affiliated VCs such as Spring Camp.

#11 Metaverse raising content ransom

As technology related to the metaverse develops, the content market that can be enjoyed in that space is also growing. As a result, the price of visual special effects (VFX) makers has also risen significantly. VFX is often referred to as ‘Computer Graphics (CG)’. We are producing metaverse content based on our ‘virtual production’ technology, which merges the real world and the virtual background using CG in real time.

Most Expensive VFX Makers This is V Corporation. In March, in the Series A round, it immediately attracted an investment of 100 billion won and was evaluated at a corporate value of 1 trillion won. It has risen to the ranks of unicorn companies within 13 months of its establishment. The company was in charge of developing ‘ae’, an artificial intelligence (AI) avatar for girl group Espa, and also participated in the special effects of the Netflix original drama ‘Hell’ starring Yoo Ah-in and others.

VA Corporation was founded by Sang-Rok Lee, Chairman of Standers, who led Carver Korea, the operator of the famous cosmetic brand AHC. In 2017, Chairman Lee sold AHC to global company Unilever for about 3 trillion won and wrote the ‘startup jackpot myth’.

As other VFX producers, Enjin Visual Wave (10 billion won) and Vive Studios attracted investment one after another.

Animation producers such as Content Lab Blue (10 billion won), Studio Aeon (6 billion won), MJet Family (4 billion won), and Usual Media (3.6 billion won) also raised their ransom by attracting investment one after another.

Lee Min-hong, CEO of Carpen Street, said, “Just as pickaxes and jeans were sold in the ‘gold rush’ in the western United States in the 1850s, software related to content creation will emerge in the metaverse era.”

As the content market in the metaverse era grows, related software service companies are also expected to benefit.

Carpen Street, which operates Acorn 3D, an open platform for buying and selling 3D design sources, attracted 10 billion won in investment from Spring Camp and IMM Investment in February. Carpen Street greatly reduces the working hours of webtoon writers by combining architectural 3D design sources with webtoons.

Action Power (13.3 billion won) that uses AI to convert voice into text, and Lion Rocket (6.5 billion won), which uses AI humans to produce videos by just entering text, have also raised their ransom as an AI company for content production.

#12 Why are you flocking to enterprise collaboration tools?

The digital transformation of businesses is accelerating due to COVID-19. The two pillars are enterprise software development (B2B SaaS) and logistics automation.

The market is so active that 80% of North American unicorns are cloud-based B2B SaaS. Although the country is in its infancy Expectations are high that the next ‘Big Thing’ will come out of SaaS. In particular, competition in the corporate collaboration tool (collaboration tool) market is fierce. This is because the way companies work is rapidly changing to non-face-to-face due to the spread of telecommuting. Naver also joined the market competition by introducing ‘Naver Works’.

Sweet Technology, headquartered in Silicon Valley, USA, is challenging the global enterprise collaboration tool Slack with an ‘all-in-one’ strategy. Its strength is that it allows you to use Slack, MS Office, and Google Mail at once on the ‘Sweet’ screen.

Online whiteboard-based visual collaboration tool ‘Ola’ (SW developer Osiris Systems), research and document creation software ‘Typed’ (Business Canvas), work project management solution ‘Clovine’ (Heaventree), together in one document Collaboration tools that added various functions, such as ‘Collavi’ (Collavi Team), a collaboration tool to create, and ‘Sharp’ (Sharp & Company), a collaboration tool for on-site employees such as schedule and task management of store employees, attracted investment one after another.

In addition, there were many B2B SaaS startups in various fields such as personnel management, accounting/taxation, and quality inspection. Dudlin, which operates ‘Greeting,’ a corporate recruitment management solution, Nullosoft, which provides AI-based tax filing service ‘Sel’, Spandit, which provides a corporate expense settlement and management software solution (SaaS), and AI-based quality inspection ( H-Bsmith, which provides QA) automation services, and others were invested.

#13 Which company is ‘hot’ in the AI ​​field?

In the AI ​​field, Upstage and Voyager X are emerging as ‘hot’ startups. Both companies succeeded in attracting large-scale investments of more than 30 billion won last year.

up stage is from NaverThe company was established in 2020. We are supplying ‘data labeling’ tools to companies that want to adopt AI-related technologies. We have secured customers in various fields such as finance, education, and distribution. The company is led by CEO Kim Seong-hoon, who used to be Naver Clova AI leader, Lee Hal-seok, a former Naver Clova OCR/Visual leader, and Park Eun-jung, a former Naver Papago translator modeling leader.

Voyager X is a company founded in 2017 by CEO Nam Se-dong, a ‘genius developer’ who developed the chat service ‘Say Club’ and the camera app ‘B612’. The company introduced ‘Bru’, an AI-based image editor, and ‘V Flat’, a mobile scanner app. Brew is a software that allows you to quickly and easily handle images as if you were editing a document with a word program. AI analyzes the audio in the video and automatically creates subtitles and helps with translation. The advantage of V-flat is that AI analyzes the surface of a document or book and automatically flattens it.

In addition, companies that provide enterprise software using AI technology have succeeded in attracting investment one after another. Friendly AI, a cloud-based large-scale AI model learning solution, AMO with deep learning data labeling technology in the autonomous driving field, Cloa, a data pipeline solution company that helps process massive data in real time, based on process facility analysis Sizzle, which provides cost-saving and productivity-enhancing solutions, and Ainsys I&C, an AI-based network security solution.

#14 Regulatory Issues Remaining Digital Healthcare

More than 30 telemedicine platforms have been created due to the COVID-19 crisis. The number of patients receiving remote treatment from Dr. Now, the No. 1 medical app that provides non-face-to-face services from remote treatment to drug delivery, exceeded 4 million as of March accumulated. Dr. Now received an investment of 10 billion won from Softbank Ventures, Saehan Startup Investment, Crit Ventures, and Hashed in October of last year.

The telemedicine platform remains a regulatory issue. In order to fill the medical gap caused by COVID-19, the government temporarily allowed telemedicine, such as phone consultations and prescriptions, from February 2020. In the original case, telemedicine, remote patient monitoring, and drug delivery are all illegal under the Medical Act, Pharmacist Act. The VC industry is keen to see if telemedicine will be allowed even after the corona situation is over.

Rowan, a brain disease digital treatment company, also attracted an investment of 6 billion won in February. Rowan is a company that developed Schbrain, a cognitive interventional treatment program for dementia prevention.

Likewise Software investment in the digital healthcare sector is active, but The amount of investment in the biomedical industry has decreased this year. In the nine months from April to December last year, the amount of investment in the bio/medical industry series A was 507.6 billion won, but the investment amount for the three months from January to March of this year was only 76.7 billion won.

Last year, large-scale investments such as I’m Neuron Bioscience (30 billion won), a brain disease treatment company, EasyEndo Surgical (30 billion won), a kidney stone removal robot company, and Oncoinsite (21.5 billion won), an anti-cancer immune cell treatment company, continued one after another.

Starting this year, List Biotherapeutics (21 billion won), a producer and developer of microbiome drug CDMO, Medical endoscopy system Mediintech (8 billion won), Diabetes treatment Owl Bio (7.2 billion won), VR ophthalmic tester Mcurex (6.5 billion won), RNA control Only nine companies received investment, including Neona (2.7 billion won), an immune cancer drug using a network.

#15 Which mobility company surpasses Kakao?

In the mobility field, Jin Mobility, the operator of ‘IM Taxi’, attracted large-scale investment in the Series A phase. In January, it completed an investment round of 80 billion won for Everbest Partners and Yuanta Investment. The enterprise value has already reached 230 billion won.

The company operates an I.M. Taxi service that specializes in calling large carnival taxis. It adopts a monthly salary system rather than a private payment system, providing drivers with high job satisfaction through stable revenue generation.

I.M Taxi has been growing rapidly since the service was launched in February last year. It has secured 1,200 taxi licenses, surpassing that of Kakao Mobility in terms of the scale of direct-managed taxis alone. Recently, it has been aggressively increasing its size by acquiring large taxi corporations such as Daehan Sangwoon, Samkwang Transportation, and Gyeongan Transportation. The goal is to increase the number of vehicles to 1,500 by the first half of this year.

Conatus, which operates ‘half and half taxi’, a taxi sharing brokerage platform, received an investment of 3.5 billion won from Humax last year. Humax is a company founded in 1989 by Chairman Byun Dae-gyu, who is considered the ‘first generation of ventures’. In order to make a breakthrough in the existing set-top box business, we have acquired more than 17 mobility-related companies, including Humax Mobility, since 2018.

There are only 5 startups that Humax has invested in the Series A round in the past year. In addition to Conatus, ‘Caredoc’, an elderly care facility brokerage platform, The Swing, an electric kickboard sharing company, Nature Mobility, which operates a rental car price comparison platform ‘Jjimcar’, and ‘Rainpo Company’, a high-end car calling service, aiming to become the ‘Mobility King’. there is.

In addition, Snackfor, a regular delivery service for office snacks, Wehurdling, which operates a lunch subscription service ‘Weit’, Today’s Flower, a flower market early morning delivery service, and Damhwa Company, which operates a traditional liquor subscription service ‘Suldamhwa’, are investing in one after another. It was childish.

#16 Hyundai Motor Company’s most sought after leader in autonomous driving

Eight companies in the autonomous driving field succeeded in attracting investment. Mobility integration platform Fort2Dot completed the Series A round in February and raised a total of 149 billion won in investment. Forty to Dot, where Hyundai Motors made a seed investment in 2019, is operating ‘TAP’, an integrated autonomous driving mobility platform from public transportation to delivery.

As autonomous driving software companies using 3D lidar technology, Tor Drive (20 billion won), Ride Flux (16.5 billion won), and Autonomous A Investment (16 billion won) each succeeded in attracting investment.
Spring Cloud, which provides autonomous driving solutions, raised 18 billion won from Mando and Korea Credit Guarantee Fund in January, while Mas Auto, which provides software for machine learning-based autonomous driving trucks, raised an investment of 15 billion won in March. .

In fact, it would be great if there were many high value-added startups such as autonomous driving and AI, but the reality is that they are not. Is it a problem with large corporations that are lagging behind in innovation, is it a VC that is desperate to make money right now, or is it a lack of human resources to commercialize difficult technologies? “The capital power of our economy is not at the level that can make Tesla.”The self-help assessment of an institutional investor is ringing in our ears.

※ This concludes the ’16 formulas for successful startups in Series A’ introduced in parts 1 and 2. In Part 3, we look at ‘VCs who are serious about investing in Series A despite the end of the venture investment ‘party’.

Reporter Heo Ran/Kim Jong-woo why@hankyung.com

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