With $4B food delivery acquisition, Korea poised to enter upper tier of startup hubs
2019-12-18 10:41

Seoul and South Korea may well be the secret startup hub that (still) no one talks about.


While often dwarfed by the scale and scope of the Chinese startup market next door, South Korea has proven over the last few years that it can — and will — enter the top-tier of startup hubs.


Case in point: Baedal Minjok (typically shortened to Baemin), one of the country's leading food delivery apps, announced an acquisition offer by Berlin-based Delivery Hero in a blockbuster $4 billion transaction late this week, representing potentially one of the largest exits yet for the Korean startup world.

举个例子:韩国领先的外卖应用 Baedal Minjok(通常简称为 Baemin)宣布,已收到总部位于柏林的外卖平台 Delivery Hero 的 40 亿美元收购要约。这可能是韩国创业公司到目前为止规模最大的投资退出交易之一。

The transaction faces antitrust review before closing, since Delivery Hero owns Baemin's largest competitor Yogiyo, and therefore is conditional on regulatory approval. Delivery Hero bought a majority stake in Yogiyo way back in 2014.

这笔交易在完成之前仍然需要接受反垄断审查,因为 Delivery Hero 也拥有 Baemin 最大的竞争对手 Yogiyo,因此交易必须得到监管部门的批准。Delivery Hero 早在 2014 年就收购了 Yogiyo 的多数股份。

What's been dazzling though is to have witnessed the growth of this hub over the past decade. As TechCrunch's former foreign correspondent in Seoul five years ago and a university researcher locally at KAIST eight years ago, I've been watching the growth of this hub locally and from afar for years now.

过去 10 年,韩国创业生态的发展令人眼花缭乱。5 年前在首尔,我曾是 TechCrunch 的驻外记者。8 年前,我还在韩国科学技术院(KAIST)担任大学研究员。因此多年来,我一直在当地和远方观察韩国作为创业中心的发展。

While the country remains dominated by its chaebol tech conglomerates — none more important than Samsung — it's the country's startup and culture industries that are driving dynamism in this economy. And with money flooding out of the country's pension funds into the startup world (both locally and internationally), even more opportunities await entrepreneurs willing to slough off traditional big corporate career paths and take the startup route.


Five years ago, Baemin was just an app for chicken delivery with a cutesy and creative interface facing criticism from restaurant franchise owners over fees. Now, its motorbikes are seen all over Seoul, and the company has installed speakers in many restaurants where a catchy whistle and the company's name are announced every time there is an online delivery order.

5 年前,Baemin 还只是一款专注于鸡肉制品外卖的应用,界面可爱而富有创意,餐厅特许经营权的所有者对其收费感到不满。目前,该公司的送货摩托车在首尔各地随处可见,而 Baemin 也在许多餐厅安装了喇叭。每当有在线订单到来时,都会发出标志性的声音和公司名称。

(Last week when I was in Seoul, one restaurant seemingly received an order every 1-3 minutes with a “Baedal Minjok Order!” announcement that made eating a quite distracted experience. Amazing product marketing tactic though that I am surprised more U.S.-based food delivery startups haven't copied yet).

(上周当我拜访首尔时,一家餐厅似乎每隔 1 到 3 分钟就会收到订单,并发出 “Baedal Minjok 订单!” 的播报,使得用餐过程很吵闹。这是令人惊叹的产品营销策略,而令我惊讶的是,美国的外卖公司还没有开始效仿。)

The strengths of the ecosystem remain the same as they have always been. A huge workforce of smart graduates (Korea has one of the highest education rates in the world), plus a high youth unemployment and underemployment rate have driven more and more potential founders down the startup path rather than holding out for professional positions that may never materialize.


What has changed is venture capital funding. It wasn't so long ago that Korea struggled to get any funding for its startups. Years ago, the government initiated a program to underwrite the creation of venture capital firms focused on the country's entrepreneurs, simply because there was just no capital to get a startup underway (it was not uncommon among some deals I heard of at the time for a $100k seed check to buy almost a majority of a startup's equity).

发生改变的是风投基金。就在不久之前,韩国的创业公司还在为融资来源而烦恼。几年前,韩国政府启动了一项计划,为专注于韩国创业者的风投基金提供担保。原因很简单,当时创业公司缺乏启动资金。(在我当时听说的一些交易中,用 10 万美元就能买下创业公司大部分股权的情况并不少见。)

Now, Korea has become a startup target for many international funds, including Goldman Sachs and Sequoia. It has also been at the center of many of the developments of blockchain in recent years, with the massive funding boom and crash that market sustained. Altogether, the increased funding has led to a number of unicorn startups — a total of seven according to the The Crunchbase Unicorn Leaderboard.

现在,韩国已经成为包括高盛和红杉在内许多国际资本开展创投活动的目的地。近年来,随着市场的繁荣,韩国也成为了区块链发展的中心。整体来看,资金的增加已经培育了多家独角兽公司。根据 CrunchBase 独角兽排行榜的数据,韩国这样的公司共有 7 家。

And the country is just getting started – with a bunch of new startups looking poised to driven toward huge outcomes in the coming years.


Thus, there continues to be a unique opportunity for venture investors who are willing to cross the barriers here and engage. That said, there are challenges to overcome to make the most of the country's past and future success.


Perhaps the hardest problem is simply getting insight on what is happening locally. While China attracts large contingents of foreign correspondents who cover everything from national security to the country's startups and economy, Korea's foreign media coverage basically entails coverage of the funny guy to the North and the occasional odd cultural note. Dedicated startup journalists do exist, but they are unfortunately few and far between and vastly under-resourced compared to the scale of the ecosystem.


Plus, similar to New York City, there are also just a number of different ecosystems that broadly don't interact with each other. For Korea, it has startups that target the domestic market (which makes up the bulk of its existing unicorns), plus leading companies in industries as diverse as semiconductors, gaming, and music/entertainment. My experience is that these different verticals exist separately from each other not just socially, but also geographically as well, making it hard to combine talent and insights across different industries.


Yet ultimately, as valuations soar in the Valley and other prominent tech hubs, it is the next tier of startup cities that might well offer the best return profiles. For the early investors in Baemin, this was a week to celebrate, perhaps with some fried chicken delivery.

不过,随着硅谷和其他知名科技中心的企业估值飙升,能带来更好回报的很可能会是二线创业中心。对 Baemin 的早期投资者来说,这是值得庆祝的一周。

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