A survey by KOTRA (Korean Trade-Investment Promotion Agency) found that more than half of Korean startups had established overseas bases without a parent company in Korea. Born global startups were first created in 29 countries in North America, Asia and Europe.
KOTRA announced that this is the result of a survey on the current situation of Korean startups in its jurisdiction targeting foreign KBCs globally in December 2022. The survey was conducted among 259 startups in 29 countries where KOTRA has shopping malls overseas. According to the survey, 51.0% of startups that entered overseas markets are “born global” startups. Born Global’s share increases every year from 37.0% in the 2020 survey, 46.0% in 2021 and 51.0% in this survey.
Of the 259 companies surveyed, 26 are startups created in 2022. Six companies managed to attract foreign investment during the year. In addition, 26 of the 198 foreign startups listed in the same survey in 2021 were excluded from the count because they either ceased operations in the past year or managed to exit (recall), such as an initial public offering or a merger and acquisition. .
36.7% of the regions entered were North America. Almost half of them, 48%, were in Silicon Valley. In addition, it was found that they entered China (19.7%), Southeast Asia (15.4%), Europe (10.8%) and Japan (6.2%). ). Regarding overseas expansion, 48% cited “to target overseas markets with appropriate services.” “Consumer and customer expansion” was the second highest at 36%.
It has been found that most startups going overseas are in their early stages. 71.4% were Series A or below, and 35.5% of companies were in the seed double stage. 64% had at most ten employees. Annual sales over $1 million accounted for 25% and sales under $10,000 accounted for 18%, showing a dumbbell-shaped distribution.
As for the entry method of foreign startups, one-time investment was the most common at 76.5%. Joint ventures with foreign companies accounted for 8.1%, followed by “flip”, which converts overseas branches into head offices, at 5.0%. Two-thirds of respondents said they needed to gain experience using government-supported projects. As for the preparation time for overseas expansion, 63.7% of companies answered that it was one to two years.
Jeon Chun-woo, head of KOTRA’s small and medium business division, said, “Overseas expansion is no longer an option for startups, but a necessity.
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