Nathan millard korean tech and startup intro jan 2015
-
Upload
danxherman -
Category
Small Business & Entrepreneurship
-
view
309 -
download
2
Transcript of Nathan millard korean tech and startup intro jan 2015
![Page 1: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/1.jpg)
A look into Korea’s tech infrastructure and Startup Ecosystem
January, 2015
Seoul, The Hottest Startup Hub In Asia?
Nathan Millard @Nathan_mill
![Page 2: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/2.jpg)
![Page 3: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/3.jpg)
It wasn’t always like this…
![Page 4: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/4.jpg)
Gangnam 1950s
![Page 5: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/5.jpg)
Gangnam 2015
![Page 6: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/6.jpg)
• 25.6M in Seoul Metropolitan Area (1/2 of population)
• Home of Samsung, LG, Hyundai, Hallyu
• Hard working (10-12 hours per day)
• Tech-savvy & Engaged
• Homogenous & Impressionable
• Trend setters• Pop culture, tech, fashion
Understanding Korea
![Page 7: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/7.jpg)
• $25,997 per capital GDP as of 2013
• Asia’s third largest e-commerce market (12%+ annual growth since 2006)
• Increasingly vibrant exit market (M&A and IPO)
• Engaged consumer base, eager to spend through tech
Korea’s Economic Landscape
![Page 8: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/8.jpg)
• Fastest mobile broadband (excellent for content consumption)
• High smartphone penetration: 80% as of September.2014
• High Android-powered smartphone penetration:90% of smartphone user
• 15 % for web-surfing & 85% for using mobile apps ( high usage in mobile-app services)
• Kakao games platform boosting Google Play
• Currently, no serious challenge against Kakao Talk
Korean Mobile Market Overview
IPhone
![Page 9: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/9.jpg)
= 85% M/S
3 big Search Engine companies
= 14% M/S
Samsung & LG hold 80% m/swhile Apple 20% in device market
= 15% M/S
92 % m/s for Kakaotalk & 4% for LINE in messenger service (as of Sep.2014)
Large (Korean) Corporations Dominate
![Page 10: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/10.jpg)
•#3 in the world for downloads
•#3 in the world for revenue
•25%+ online for 8+ hours/day
•$100M USD monthly app revenue
<Whole population engaged>
App Opportunity in Korea
![Page 11: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/11.jpg)
• First country to have professional PC gamers
• PC rooms used to dominate free time (now mobile)
• Highly experienced gaming market place
• Exceptionally high consumer expectations
• Infrastructure supports ‘heavy’ games and apps
• 80%-90% of app revenue from games
<Anipang: First Kakao Game>
Gaming in Korea
<Clash of Clans: #1 ranked in Google & Apple app store>
![Page 12: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/12.jpg)
• Highly trend-focused, social, and fickle
• 90% of top games released in previous month
• Local apps / services often triumph over imports
• Large marketing budgets are [now] required for engagement
• Localization can not be stressed enough
Koreans as App Consumers
![Page 13: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/13.jpg)
• World leader in mobile payments
• Extensive NFC enabled devices • SK Planet’s ‘T Cash’• Used for 54% of in-app purchases
• Connected devices offer future opportunity
• Samsung aims to be IoT leader
• Korea is a great test market / gateway to Asia
• Bitcoin emerging (Korbit, Coinplug, CoinOne)
Mobile Payments Situation
![Page 14: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/14.jpg)
Unit: $Billions “10 companies belong to what
we call the “Korean Unicorn Club” (by our definition, Korean software companies valued at over $1 billion by public or private market investors)” – John Nahm, Strong Ventures (9/11/2014)
US Population: 318 million | S. Korea Population: 50 million (15.7% of US) US GDP: $16,8 trillion | S. Korea GDP: $1,3 trillion (7.8% of US) All Rights Reserved
Korean Unicorn
![Page 15: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/15.jpg)
Startup Ecosystem
Accelerators
Startup Ecosystem
![Page 16: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/16.jpg)
• 130 Angels (around 50 active)
• Seed Investment: KOISRA
• Series A: Capstone, CCVC, Venture Port, Formation 8, K Cube Ventures, Strong Ventures, Smilegate Investment
• Series B: Altos Ventures, CyberAgent Ventures, Softbank Ventures, Qualcomm Ventures, IMM Investment, NeoPlux, Stonebridge Capital, DSC Investment, SL Investment
Startup Ecosystem
Investors & VCs
Startup Ecosystem
![Page 17: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/17.jpg)
Startup Ecosystem
Co-Working Spaces
Startup Ecosystem
![Page 18: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/18.jpg)
• $5B USD pledged for building “creative economy”
• Legitimizing entrepreneurship
• Innovation centers in major cities
• TIPS program (1:5 & 1:7 matching)
Startup Ecosystem
Government
Startup Ecosystem
![Page 19: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/19.jpg)
• Hanllyu (K-pop, Dramas, Movies)• On mobile and Global
• Gaming: Devsisters, Smilegate, NCSoft, Nexon, WeMadeEntertainment
• Online content distribution: Viki, DramaFever
Startup Ecosystem
Content Heritage
Startup Ecosystem
![Page 20: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/20.jpg)
• IT infra that supports IT development
• Quality engineers, with strong work ethic
• Greater understanding of risk
• Entrepreneurs with global vision and bigger, better quality ideas
• Mentor networks and Angel investors
• Government support (money, PR, education, economic diversity)
• Exchange of students & ideas (Korea – West)
• Economic conditions that can support entrepreneurship
Startup Ecosystem
Reasons for Growth
Startup Ecosystem
![Page 21: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/21.jpg)
Startup Ecosystem
StartupsEntrepreneurship in Korea has never been this hot. Korean founders are passionate, talented and building companies that are having a real impact in the region, and across the world. While there is much still to achieve, the future looks very bright.
• Highest number of startups per capita in the world• China has highest number of startups of any country• USA has ‘the best’ startups
• Mostly consumer facing mobile services• 80% of the country own smartphone & Per capita, 280$ annual mobile
spend in Korea vs. 105$ in U.S• Fastest broadband service: 25 Mbps in Korea vs. 4.5Mbps global average
• Gaming, E-commerce, social-powered platforms, Contents
Startup Ecosystem
![Page 22: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/22.jpg)
Hottest StartupsHottest Startups
![Page 23: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/23.jpg)
• Not enough M&A (around 98% of exit in Korea is through IPO. Figure is similar in rest of Asia, except China where is around 50%-50%)
• Large Asian corporations don’t acquire enough startups in Asia.(except China)
• Japanese companies are most active, but mostly high value, rather than volume. Examples are Viki and Viber. (only a small number of startups / VCs benefit)
• US companies don’t know how to engage with Asian M&A opportunities. Also US companies are also more focused on technology, rather than
users / sales. (Asian startups are more service than tech driven)
• In Asia, M&A is generally focused around users / revenue.
• There is general disconnect between what US companies are looking for and what Asian companies can provide.
ProblemsProblems with M&A in Asia
![Page 24: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/24.jpg)
M&A & IPOTotal M&As in Korea in 2013 / 2014 http://www.mergermarket.com/pdf/MergermarketTrendReport.Q12014.Global-FinancialAdvisorLeagueTables.pdf
First Quarter of 2014. (pg10-11)http://www.mergermarket.com/pdf/MergermarketTrendReport.H12014.Southkorea.pdf
First half of 2014 http://www.mergermarket.com/pdf/Mergermarket.2013.LegalAdvisorM&ATrendReport.pdf
M&A report 2013Which Korean companies are acquiring startups? (including gaming)DaumKakao, NHN Entertainment, SK Planet, Camp Mobile (NHN subsidiary), Nexon (gaming) http://www.etnews.com/20141106000010 -Sk Telecome buyout of US startup ‘Shopkick”
Why is there NOT a healthy M&A culture in -Why is M&A so weak in Korea?Samsung & LG – want to do things internally, because they think it’s cheaper / easier / quicker (they were wrong). Samsung is now doing M&A, but mostly overseas.Lack insight to see the future (unlike like Softbank)Struggle to deal with post-merger integration (doesn’t work due to company culture)
M&A and IPO<More inbound, cautious of outbound
deal>
• Inbound merger in H1 2014 reached 11.1bn, x12times from H1 2013. But 51% drop in outbound deal(1.4bn) compared to H1 2013 (2.9bn). • Inbound mergers were mostly big corporate mergers.
• Korean companies are getting cautious in acquisition with new companies. • Survey among 317 CEOs (Korean/Chinese/Japanese) on
willingness on M&A plans shows: only 5% of korean CEOs willing new M&A while 34% of jananese strongly willing to new M&A , and 53 % of them seeking for outbound M&A.
![Page 25: Nathan millard korean tech and startup intro jan 2015](https://reader033.fdocuments.us/reader033/viewer/2022042906/58a317f41a28ab1d068b5d51/html5/thumbnails/25.jpg)
• Maturing platform situation (dominated by 1 – 2 players)
• Kakao–Daum merger could create super-company?
• Global competition (hardware, software, services)
• Opportunities in IoT & smart home
• Korean tech startups & SMEs more determined globally
• Korean consumers will lead global mobile trends
• Closer relationship with China
Today’s TrendsToday’s Trend