From Startups to Scale-Ups: Korea’s Venture Sector Deepens R&D and Attracts Private Capital (Image courtesy of Yonhap)
SEOUL, Jan. 5 (Korea Bizwire) — South Korea’s venture companies have sharply strengthened their technological competitiveness over the past decade, significantly expanding research and development spending and intellectual property holdings while also improving their financial health, according to a government-backed survey released on Sunday.
Data from the Venture Enterprise Survey, comparing results from 2015 and 2025, show that venture firms devoted an average of 6.5 percent of their revenue to R&D in 2024—more than triple the level of large conglomerates and far above that of small and medium-sized enterprises.
A decade earlier, venture firms’ R&D intensity stood at just 2.9 percent, underscoring how dramatically their innovation focus has deepened.
Nearly all venture companies now maintain in-house research units or dedicated R&D personnel, up from 85 percent ten years ago. Their average number of intellectual property rights rose to 12.8 per firm, from 7.4, while pending patent applications also climbed sharply.
More than a quarter of surveyed ventures now rate their technology as on par with, or superior to, global leaders—up from just one-fifth a decade ago.
The survey suggests that South Korea’s venture sector has evolved from a pool of early-stage, idea-driven startups into a more mature group of firms accumulating and refining proprietary technologies.
That shift has been reinforced by changes to the venture certification system in 2021, which placed greater emphasis on technological innovation rather than short-term financial performance.
A researcher works in the laboratory of a venture company in North Chungcheong Province developing pharmaceutical products. (Image courtesy of Yonhap)
At the same time, the financial profile of venture firms has improved. Their average debt ratio fell by 21 percentage points over the decade, while equity ratios rose, contrasting with largely stagnant balance sheets among general small businesses.
Reliance on government-backed policy financing has eased as private capital has flowed in: venture capital and angel investment now account for nearly 17 percent of new funding, up from virtually zero ten years ago.
Founder ownership remains dominant but has declined, making room for institutional investors. Stock options, once rare, are now widely used as tools to retain key talent.
Survey respondents also reported fewer instances of unfair trading practices when dealing with large corporations, reflecting the impact of tougher enforcement and standardized contracts.
Taken together, the findings portray a venture ecosystem that is not only more innovative but also more financially resilient and market-oriented—positioning South Korea’s startups as increasingly credible competitors on the global technology stage.
Kevin Lee (kevinlee@koreabizwire.com)
