A couple of years ago, a list of the world’s top startup ecosystems compared cities like Berlin, Tel Aviv, and London to get at what made startups successful. There wasn’t enough data to compare Asia at the time, but there’s one city in the region that’s quietly been developing into another important tech hub: Seoul.
When you first think of South Korea, you might think of Samsung, the singer/songwriter PSY, or even the occasional K-drama. Take a closer look and you’ll find that 80 percent of the population are LTE users, the country is among the top three in terms of mobile app revenue, or that it’s been ranked first by Bloomberg’s Global Innovation Index (based on things like density of public tech companies).
While these might be interesting to know, the things that make a startup community “great” boils down to the quality of talent, entrepreneurs, startups and capital sources in a given locale. Silicon Valley is historically significant due (in part) to these very factors, and already-established cities like New York have become prominent as these same “ingredients” matured.
In Seoul, a city nearly 5 times as dense as New York, the startup scene is still nascent. Ask anyone on the street about startups though, and you’ll find that an increasing number of young professionals are working on something startup-related. There are whispers of an IPO on the horizon for Coupang, and another, Kakao, recently announced a merger with the nation’s second largest internet portal Daum Communications. Consider these, along with the companies like Nexon and Naver that have achieved a $1 billion-plus valuation.
There is still a ways to go before Seoul can be billed as the next Silicon Valley (or not), but success stories like these are creating a positive signal. This is especially the case when it comes to drawing more talent in to the tech industry, away from the more traditional employment route with large conglomerates like Hyundai or SK Group. Instead, startups like Ticket Monster (acquired by Living Social, then Groupon), Baedal Minjok 배달민족, and MemeBox (voted top three of Y Combinator’s Winter 2014 demo day) have been raising the profile of entrepreneurship in the region.
Capital sources have been taking notice, too, with growing interest from overseas VCs, such as SoftBank Ventures, Rakuten Ventures, GlobalBrain, along with the rise of angel groups, accelerators, event organizations, and press that promote and support entrepreneurship. Take a look at K Cube Ventures, Sparklabs, D.CAMP and beSUCCESS. This emphasis on creating a community and supporting founders is crucial, and has been a long time coming for Seoul.
The government has been playing an important role, as well. For example, South Korean president Park Geun-Hye has made a fairly significant bet on the tech sector (and the creative economy) by pledging to invest $3.7 billion in startups over the next three years. According to her plan, the government will also ease regulations on industries like healthcare, education, finance, and software. In Seoul, Mayor Park Won-Soon has focused on his administration’s policy efforts is the Seoul Social Investment Fund (the first private-public joint social investment fund in Asia) which aims to invest in solutions to societal problems.
This has led to the growth of a social entrepreneurship community, as well, with investors and incubators paving the way, like sopoong ventures — started by the founder of Daum, Jaewoong Lee, and Root Impact. Resources like these focus on advising and supporting the next crop of social entrepreneurs who are building businesses (e.g. Wisdome) that are both for profit and, more importantly, pushing the world forward.
Despite some of the real challenges that face a nascent ecosystem, I’m a passionate (and optimistic!) observer of the community being built there. As Jonathan D. Solomon, architect and curator of Practical Utopias, put it, “Asia today is a vast experiment in what makes a city.”
Seoul falls into this very ethos of imagining the future, and my hunch is that the exciting things being built there will have a broader appeal towards making the world a better, more interesting place.
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