The Venture Summer Forum holds an annual conference in Seoul on August 20, 2024 (Courtesy of the Ministry of SMEs and Startups)
In South Korea, those who made a fortune from property investments become a subject of envy, but startup founders who made big money from their exits become a target of criticism, Saeju Jeong, co-founder and CEO of the US healthcare unicorn Noom, said at a recent startup mentoring forum.
His speech resonated with the attendants of the Venture Summer Forum held in Seoul on Tuesday. They gave big applause to his remarks: “What’s wrong with startup founders getting rich?”
Jeong drew a comparison between the public sentiment toward startup founders in the US and South Korea.
In the US, startup entrepreneurs who exited from their companies for big profits are highly recognized. But in Korea, they are stigmatized as unethical businessmen only chasing money, instead of growing the company.
Jeong is a self-made Korean American businessman who moved to New York at the age of 25 and in 2017 established Noom that tracks its subscribers’ food intake and exercise habits. The healthcare app is now valued at around $3.7 billion.
Baedal Minjok, or Baemin for short, is South Korea’s No. 1 food delivery app
Kim Bong-jin, former chairman and founder of Woowa Brothers Corp., the operator of South Korea’s No. 1 food delivery app Baedal Minjok, was at the center of public criticism over the big fortune he made from the exit.
In 2019, he sold Woowa Brothers to Germany’s Delivery Hero SE for $4.3 billion, sparking public resentment. Some led campaigns to boycott the delivery app, saying his exit resulted in Baemin users paying delivery fees to a German company.
But Kim has returned to make a new venture. His newly founded Grande Clip has recently acquired a 50% stake in Stayfolio, a Korea-based property rental platform, becoming the latter’s largest shareholder with management right.
Sam Ahn, former CEO of the video chat service company Hyperconnect, has established an AI-based social platform after selling Hyperconnect to Match Group, the operator of the world’s largest dating app Tinder, for around $2 billion in 2021.
The exit deals for Hyperconnect’s Ahn and Woowa Brothers’ Kim marked the two largest cross-border transactions in South Korea.
Ju-wan Kim is a reporter for The Korea Economic Daily
Now their ventures into new businesses are forming virtuous cycles for South Korea’s startup ecosystem. However, politicians appear to turn back the clock.
Lawmakers have drawn up 283 bills in relation to corporate regulations, just two months after the 22nd National Assembly opened.
That is nearly double the number of bills proposed during the same period of the 21st National Assembly.
Israel, one of the top startup hubs in the world, has built a strong foundation to foster startups. Of the unicorns with a corporate value of $1 billion or more in the world, Israel made up 2%. In comparison, South Korea, with a population five times larger than that of Israel, claims only 1.2%.
According to the Ministry of SMEs and Startups, the number of startup entrepreneurs under the age of 39 has decreased for four consecutive quarters as of the first quarter of this year.
This is the longest period of decline for the cohort since related statistics began to be compiled in 2016.
To revitalize our startup ecosystem, we’d better to give the thumbs-up to entrepreneurs who made money in a fair manner, rather than being jealous of their success.
By Joo-Wan Kim
kjwan@hankyung.com
Yeonhee Kim edited this article
