Top 10 Most Well-Funded Fintech Startups in South Koreaby Fintech News Hong Kong January 31, 2023
South Korea’s fintech industry is set to get a boost this year onwards as the government plans to increase its financial support to the sector and launch new initiatives to help promising companies grow, scale and expand overseas.
The Financial Services Commission (FSC) said in December 2022 that the size of the Fintech Innovation Fund will be increased from 500 billion won (US$380 million) to 1 trillion won (US$760 million) to support the fintech firms over the next four years.
Along with this, the FSC said that the supply of fintech-related loans and guarantees through policy financial institutions like the Korea Development Bank and the Industrial Bank of Korea, Korea Credit Guarantee Fund, will be pushed to 200 billion won (US$162 million) per year, providing fintech companies with greater chances to secure funding.
The FSC also said that more support will go to the global expansion of fintech companies, providing them, for example, with data on overseas venture capital, accelerators and global funds investing in South Korea and linking them with potential backers.
The government will also be launching new innovation growth funds worth 15 trillion won (US$12 billion), as well as loan schemes tailored to the needs and the risks associated with startups backed by venture capital (VC) firms.
Amid South Korea’s burgeoning fintech industry, we look today at some of the country’s most notable private fintech companies, delving in particular into those that have secured the most funding from investors.
For this list, we used data provided by Tech in Asia, Dealroom, CB Insights, news agencies, as well as companies’ press releases. The list excludes companies that were acquired or merged with other companies.
Viva Republica (Toss) – US$1.7 billion
Founded in 2013, Viva Republica is a South Korean technology company active in lending, payment services, financial services and stock brokerage. It is the operator of the financial super-app Toss, which had over 20 million users in South Korea in 2021.
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.
With a valuation of US$7 billion, Viva Republica is the most valuable unicorn startup in South Korea, data from CB Insights show. The company closed a US$405 million round in December 2022, which it said it would use to accelerate growth for its challenger bank, Toss Bank, and its retail investment app, called Toss Securities. It has secured a total of US$1.7 billion in funding, according to CB Insights.
Naver Financial – US$683 million
Naver Financial is a subsidiary of South Korea’s tech giant Naver that provides a variety of financial services including bank accounts, stocks, and credit cards. The company operates Naver Pay, a mobile payment service for e-commerce transactions that enables users to pay for goods online by using only their Naver ID. It also provides a tracking system for deliveries and refunds through an integration with the Naver shopping platform’s checkout system.
Naver spinned off its Naver Pay mobile payment platform business into a separate company, Naver Financial, in 2019, with an aim of expanding into other areas of finance, including09 loans, insurance and investment. The new venture secured a US$683 million investment from Mirae Asset shortly after.
Naver Financial is now reportedly looking to more than double the annual transaction volume of its core Naver Pay service within the next three years. It’s planning to new loan services for private businesses as well as enhancement of global mobile payment services, the company said in June 2022.
Carrot – US$340 million
Founded in 2019, Carrot is a fully-licensed 100% digital insurance carrier, providing customers with easy and accessible insurance, transparent premiums, artificial intelligence (AI) automated accident registration and prompt dispatch of help services all made possible via its proprietary technology.
Carrot is also pursuing business in the “pay-as-how-you-drive auto insurance” area where premiums are assessed using a customer’s driving patterns and behavior through sensor data analytics.
The company claims it has more than 100 national and international partnerships, including collaborations with governmental agencies.
Carrot closed a US$250 million round in late-2022, bringing its total funding to about US$340 million. The company said it would use the proceeds to strengthen its position as a pioneer in the South Korean market, enhance its tech capacities, as well as on external open innovation activities. Carrot anticipates faster rate of growth in coming years and expects to reach break-even by 2024. It plans to go public by 2025.
Carrot is valued at around US$850 million.
Qraft Technologies – US$165.8 million
Founded in 2016, Qraft Technologies is an investment technology company aiming to drive growth in the asset management industry through its innovations in AI and investing.
The company has four AI ETFs listed on the NYSE (tickers: QRFT, AMOM, HDIV, NVQ) and offers also business-to-business (B2B) AI solutions, including a robo-advisory solution and an AI order-execution system.
From data processing to alpha research and portfolio execution, Qraft Technologies has established a track record in developing innovative AI solutions that are said to be used by major financial institutions.
Qraft Technologies closed a US$146 million funding round in January 2022, which it said it would use to accelerate its ongoing expansions into the US and China and embark upon strategic projects. According to CB Insights, the company has secured a total of US$165.8 million in funding.
Chai – US$120 million
Chai is a payment company that aims to bridge the payment gap in Asian markets by providing a unified payment orchestration solution for local merchants through a single application programming interface (API).
The company operates two main products: ChaiPort, a merchant-facing payment API that allows integrations with a wide range of payment options including credit cards, digital wallets, bank transfers, and cross-border payments; and a consumer payment suite which includes an e-wallet and an accompanying debit card.
Chai claims its ChaiPort solution already surpassed 7 trillion won (US$6 billion) in annual transactions, as of November 2021, in South Korea, and says its solution has already been launched in Vietnam and Thailand.
Chai closed a US$45 million Series B+ round in December 2021, which it said it would use to expand its footprint in Southeast Asia and develop a fully automated end-to-end payment infrastructure for digital merchants in Asia. The company has raised about US$120 million in funding so far.
Wadiz – US$120 million
Launched in 2012, Wadiz is a South Korean crowdfunding startup that operates in both equity crowdfunding and rewards-based crowdfunding. The company claims it is the country’s market leader in the two areas, holding more than a 60% market share.
Wadiz says a total of US$500 million has been raised through its platform so far, for a total number of listed projects of 43,000. It claims more than 10 million visitors per month and three million members.
Wadiz closed a US$85 million Series D in December 2021, which it said it would use to expand its offering with products including corporate loans and direct investments. The round brought the company’s total funding to about US$120 million, according to Dealroom and other sources.
Korea Credit Data (KCD) – US$112 million
Founded in 2016, Korea Credit Data (KCD) provides small and medium-sized enterprises (SMEs) in South Korea with access to digital financial services.
KCD’s core solution is Cash Note, a bookkeeping app that helps SMEs and self-employed individuals manage their cashflow, expenditure, sales, credit card settlements, taxes and more. The company also provides SME-focused lending services through its platform, connecting SME entrepreneurs to access capital loan programs.
KCD says it has two million registered merchants. The company has made several acquisitions over the past few years, purchasing South Korean startups like ImU, a point-of-sale (POS) hardware provider, and Persona, a government subsidy alert service for SMEs. It also has a subsidiary called Korea Credit Service, which operates as a credit bureau provider.
KCD has raised US$112 million in funding so far, according to Techcrunch, its latest round being a US$24.7 million in a Series D extension round secured in October 2022. The company said it would use the proceeds to expand its team and make additional acquisitions. KCD is valued at around US$776 million.
PeopleFund – US$100 million
Founded in 2015, PeopleFund is a data-driven digital lender focused on consumer finance. The company strives to provide consumers more affordable loans and better investment opportunities.
Leveraging its proprietary, data-driven credit model, PeopleFund says it’s able to deliver better loan rates for borrowers while maintaining an industry low loss rate to benefit retail and institutional investors.
The company claims it has surpassed US$1 billion in loan originations and says it has nearly 400,000 retail investors on its platform.
PeopleFund has secured a total of US$100 million in equity capital so far, in addition to US$240 million in debt financing raised in 2022 from Goldman Sachs, CLSA Lending Ark Asia and Bain Capital.
Gowid – US$90 million
Founded in 2015 and formerly known as Dayli Financial Group, Gowid is a business-to-business (B2B) financial services company that focuses on providing corporate credit cards, installment loans, subscription management systems, and rewards programs to startups. The company’s upcoming expense management service and software-as-a-service (SaaS) marketplace will seek to enhance spending optimizations further.
Gowid also offers customized IT subscription services that help startups manage their limited business expenses, freeing up their funds for other strategic activities.
Between 2019 and 2020, the company claims its revenue grew by 39%.
The company has raised US$90 million in equity funding so far.
Dunamu – US$81 million
Founded in 2012, Dunamu is a fintech company focusing on asset management and investment. The company operates Upbit, a cryptocurrency exchange which it launched in late 2017.
Upbit is one of the largest crypto-asset exchanges in South Korea and had been at one time the third biggest exchange in the world by trade volume. The platform, which focuses on providing a superior mobile experience, offers real-time crypto prices for various markets right on the mobile lock screen, as well as analysis of various cryptocurrencies and crypto trends at-a-glance.
Dunamu also has an investment arm, called Dunamu & Partners, which invests in startups with the potential to become global leaders. As of early 2022, Dunamu & Partners had invested a total of US$83.9 million in 46 startups.
According to investment banking industry sources, Dunamu raised around US$81 million from investors in 2021.
Featured image credit: Edited from Pexels