Startups after pandemic: Winners and losers


In recent years, market volatility caused by pandemics has provided great business opportunities for South Korean startups. But amid deteriorating market prospects brought on by Russia’s invasion of Ukraine and inflation, only a handful of startups with strong business portfolios have retained their title as “the next unicorn” with an enterprise value of about $1 billion or more.

RSquare, a commercial real estate platform, said its revenue grew 61 percent year on year to 100 billion won ($70 million) in the first half of this year.

The company said its efforts to diversify its business portfolio through new channels such as data analysis and real estate investment advice have been the main drivers of its growth.

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Revenue from winning contracts to offer leases for several industrial complexes, factories and warehouses is expected to exceed last year’s 100 billion won.

In 2021, RSquare recorded sales of around 120 billion won, the highest number among local real estate technology companies and double that of Zigbang, a residential real estate platform.

Yanolja, a travel and leisure booking app operator, is also riding the peak of the endemic phase, posting revenue of 100.5 billion won and operating profit of 3.1 billion won in the first quarter of this year. In particular, the company is expanding into global markets and offers comprehensive cloud-based hospitality solutions for hotels in over 170 countries.

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Mushinsa, the nation’s largest online fashion platform by revenue, also posted revenue of 466.7 billion won last year, up 40.7 percent year-on-year. Net profit rose 18.9 percent to 54.2 billion won during the period. The company recently announced that it would expand its business to include the sale of fishing apparel and tackle, motorcycles and other two-wheelers, and hotel bookings.

On the other hand, several startups have been hit directly by mounting fears of a recession. Mesh Korea, the operator of tech-based logistics startup Vroong, had to halve its enterprise value from 1 trillion won to 500 billion won to attract investment. It posted an operating loss of 35.5 billion won last year.

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Streaming platform Watcha suffered a larger-than-expected operating loss of 24.8 billion won last year. As part of the company’s austerity measures, new projects such as webtoon and music streaming have been shelved.

Onul-siktak, which runs seafood e-commerce platform Onul-hoi, is also struggling financially. On August 31, the company advised employees to quit and stop delivery. Sources said it suffered from a recent Series C funding failure of 20 billion won.

“Difficult market situations seem to shine a light on start-ups with competitive advantages,” said an official at a venture capital firm who wished to remain anonymous. “Only those who are innovative in business can turn a crisis into an opportunity.”

Byun Hye-jin ([email protected])