South Korea’s Venture Firms Now Rank Third in National Sales, Surpassing SK and LG

Seoul’s business district (Image courtesy of Pixabay)

SEOUL, Dec. 26 (Korea Bizwire) – South Korean venture companies collectively achieved over 240 trillion won ($165 billion) in sales last year, ranking third among the nation’s top corporate groups, according to data released on December 25 by the Ministry of SMEs and Startups.

This places them behind only Samsung Group (295 trillion won) and Hyundai Motor Group (275 trillion won), but ahead of SK Group (201 trillion won) and LG Group (135 trillion won).

The report, based on an analysis of 40,081 venture companies in 2023, highlights the growing economic influence of these firms. Despite falling behind Hyundai Motor Group for the first time since 2010, venture companies have maintained a pivotal role in South Korea’s economy.

Impressive Figures in Employment and Innovation

The collective workforce of venture firms reached 935,000 employees, outpacing the combined 746,000 employees of Samsung, Hyundai, LG, and SK.

Venture firms also demonstrated a strong commitment to innovation, with an average research and development (R&D) investment ratio of 4.6%, significantly higher than the 1.8% seen in large corporations and the 0.8% among small businesses.

On average, each venture company reported sales of 6.54 billion won ($4.5 million), more than twice the average for other small and medium-sized enterprises (SMEs). The number of venture firms increased by 14.1% compared to the previous year, with 63.4% concentrated in the metropolitan areas of Seoul, Gyeonggi, and Incheon.

Diverse Sectors and Social Impact

The software sector dominated the venture landscape, comprising 12.8% of the total, followed by information and communication technology (10.5%) and machinery (7.3%). Notably, 43% of venture firms were startups less than seven years old, highlighting the dynamic nature of the industry.

Social venture companies—businesses combining social value with economic impact—also saw growth, with 2,679 such firms in 2023, a 9.4% increase from the previous year. Their average revenue rose to 3.08 billion won ($2.1 million), up 280 million won from 2023.

A Focus on the Future

Kim Bong-deok, Director of Venture Policy at the Ministry of SMEs and Startups, emphasized the critical role venture companies play in South Korea’s economic growth. “We will enhance support systems for venture firms and expand venture investments to ensure their continued success,” Kim said.

As South Korea navigates a challenging economic landscape, its venture firms stand out as vital drivers of innovation and growth, underscoring the country’s commitment to fostering a robust startup ecosystem.

M. H. Lee (mhlee@koreabizwire.com)