South Korea’s fintech industry remains small compared to the likes of China or Singapore but the sector is expected to grow significantly in the years to come supported by the government’s commitment to boost development and establish a favorable environment for the industry to thrive.
South Korea’s Financial Services Commission (FSC) is currently working on a financial regulatory sandbox set to launch in April which will let firms test their services with regulatory exemptions for a certain period of time.
Choi JongKu, chairman of the FSC, said in January that the regulator “will spare no effort to support fintech companies to come with globally competitive services and spread fintech innovation across the financial sector.”
Investment in fintech companies rose to 100 billion won (US$693.4 million) as of June 2016 from 2015’s 473 billion and 2014’s 87 billion, according to government data.
The following 10 companies are the top funded fintech in Korea based on disclosed funding rounds.
Hdac – US$258M
Headquartered in Zug, Hdac stands for Hyundai Digital Asset Company. It presents itself as an Internet-of-Things (IoT) contract platform built on blockchain technology that supports payments with state-of-the-art hardware wallets and “safe tunneling” with proclaimed advanced security features. The company is part of the Hyundai chaebol group, one of the biggest conglomerates in South Korea, and falls under the Hyundai Pay arm.
Hdac raised US$258 million in its initial coin offering (ICO) in 2017.
Kakao Pay – US$200M
Kakao Pay is the fintech subsidiary of Kakao, the South Korea firm that runs the country’s largest messaging app. Kakao Pay operates a mobile payments and transfers service built-in on the KakaoTalk messenger app which it launched in 2014. Since its inception, the service has added QR code, bar code and offline payment functionalities. In 2018, Kakao Pay surpassed 20 trillion won, or US$17.7 billion, worth of transactions, cementing itself as the undisputed sector leader in South Korea.
In 2017, the company raised US$200 million from Alibaba affiliate Ant Financial, which manages payments service Alipay and Alibaba’s digital banking business.
Viva Republica – US$197.2M
Viva Republica, through its mobile app Toss, provides a peer-to-peer (P2P) mobile payments platform in South Korea. Instead of the usual mobile banking involving OTP devices and multiple passwords, Toss models itself after Venmo and simplifies the process for bill-sharing, and other P2P-related transactions. Toss also partners with incumbent financial institutions, and other fintech players for services related to loans, payments, investments, credit score management, spending analytics and insurance.
Last year, Viva Republica became South Korea’s fourth unicorn startup after raising US$80 million at a valuation of US$1.2 billion. The round took the company to nearly US$200 million raised from investors to date.
Dayli Financial Group – US$97M
Dayli Financial Group provides data tech solutions, digital wealth management, and lead-generation services mainly through its three core divisions: Dayli Intelligence (DI), Quarterback, and Dayli Marketplace (DMP).
Dayli Financial Group is the company behind blockchain project ICON, which raised US$42.5 million in an ICO in 2017, one of the biggest and most famous ICO projects to come out of South Korea. According to Crunchbase, the firm has raised US$97 million in total funding so far.
Founded in February 2015, the company is headquartered in Seoul with offices in Tokyo.
Fantom – US$77.6M
Fantom is South Korea’s first Directed Acyclic Graph (DAG) based chain company. The main difference between DAG-based systems and blockchain-based systems are that unlike blockchain-based models, DAG-based systems require no miners to confirm each transaction and are far more scalable.
Fantom’s main goal is to disrupt multiple industries including supply chain management, telecommunications, payments and food. The company has raised a total of US$77.6 million through an ICO and VC funding so far.
Terra – US$32M
Terra is developing a price-stable digital currency that will power a payment network on the blockchain. The company partners with global e-commerce platforms to bring blockchain’s benefits to merchants and everyday consumers, and aims to evolve into an open platform for innovative financial decentralized applications (DApps). Terra was founded by a team of business, finance and blockchain experts, and has offices in Singapore and South Korea.
Aergo – US$30M
Aergo aims to provide a “fourth generation,” enterprise-ready blockchain protocol designed to be “user-friendly,” scalable, and open to developers. Aergo’s platform promises to enable enterprises to design, build and deploy their own blockchain applications with relative ease. The company’s core technology is based on open source technologies such as Coinstack by Blocko, a blockchain company in South Korea.
Aergo raised US$30 million in funding in November 2018.
MediBloc – US$30M
MediBloc is developing a healthcare information ecosystem for patients, healthcare providers and researchers. The company’s blockchain-based, decentralized healthcare big data platform allows patients to track, record and manage their medical information including doctors visits, and prescription and record updates.
MediBloc was founded in 2017 and is headquartered in Gibraltar but operates mainly in South Korea.
HonestFund – US$21M
Founded in 2015, HonestFund is a marketplace lender that uses proprietary credit assessment model based on big data to offer loans at much lower interest rates to individuals and corporates that have difficulties securing loans from traditional banks.
With more than US$300 million in cumulative loans, HonestFund is one of the fastest growing marketplace lending platforms in South Korea. The company has raised US$21 million in funding so far.
PeopleFund – US$17M
Founded in 2015, PeopleFund is a P2P lending platform that delivers loans and a full spectrum of diversified alternative investment products. Through PeopleFund’s automated proprietary credit scoring model, P-Score, users can receive an immediate credit score and apply for a loan which is fulfilled by a top-tier commercial bank within seconds.
The company claims it is the first and only South Korean P2P lending platform to fully integrate with a top-tier commercial bank to process personal and business loans that are government approved. It has raised US$17 million in funding so far.
Other resources you might be interested in
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