Helping South Korean firms go global - via Singapore

Upcoming centre to also help S'pore SMEs and start-ups enter South Korean market

Representatives of three Singapore start-ups - (from left) Ematic Solutions chief financial officer Simon Wong, Zeemart chief product officer Keith Tan and Fooyo co-founder Li Shaohuan - at the Asean-ROK Start-up Expo in Busan last November. The upco
Representatives of three Singapore start-ups – (from left) Ematic Solutions chief financial officer Simon Wong, Zeemart chief product officer Keith Tan and Fooyo co-founder Li Shaohuan – at the Asean-ROK Start-up Expo in Busan last November. The upcoming Korea Start-up Centre in Singapore, which will let South Korean firms plug into the city state’s start-up ecosystem, will also offer opportunities for Singapore start-ups to break into the South Korean market.ST PHOTO: CHANG MAY CHOON
Representatives of three Singapore start-ups - (from left) Ematic Solutions chief financial officer Simon Wong, Zeemart chief product officer Keith Tan and Fooyo co-founder Li Shaohuan - at the Asean-ROK Start-up Expo in Busan last November. The upco
Mr Choi Hyun-il (left), founder of South Korean start-up Peopet, with Busan Mayor Oh Keo-don after snagging 10 million won (S$11,600) in funding during an event in Busan organised by start-up accelerator D.Camp last November. Peopet lets pet owners register their pets and issues them with an identity card.PHOTO: D.CAMP

Keen to encourage responsible pet ownership and reduce the problem of pets being abandoned, student Choi Hyun-il started a website for pet owners to register their furry pals and be connected to an online marketplace.

His start-up business, Peopet, has drawn more than 22,000 users since August 2018, and he is building a database of information about pets - such as their common illnesses - and organising events like seminars.

"Peopet went viral on social media because of the identity cards we issue to pets, which make owners feel very proud," Mr Choi, 28, told The Straits Times. "Our goal is to be a one-stop solution for pets, and we hope to go global in 2020."

Expanding overseas will be smoother for Peopet and other budding technology firms when the first-ever Korea Start-up Centre (KSC) opens in Singapore in May, allowing South Korean firms to plug into the city state's vibrant start-up ecosystem.

Though a small country of 5.7 million people, Singapore has a start-up ecosystem that dominates venture capital deals in Asean, capturing 49.9 per cent in the first 11 months of last year. This translates to 239 deals worth US$3.7 billion (S$5 billion), according to research portal Preqin.

Singapore is home to about 3,800 technology start-ups including ride-hailing platform Grab, more than 100 incubators and accelerators, and 150 venture capital investors. Studies show that more than half of Singapore start-ups have gone global.

Slated to offer workspace, networking events and services to start and grow a business, KSC will be run by South Korea's Ministry of SMEs and Start-ups (MSS) with support from Enterprise Singapore.

Mr Roh Yong-seok, MSS deputy general for global market policy, said South Korea's government is trying to encourage more start-ups, especially those in artificial intelligence (AI), blockchain and other key technologies, to venture overseas.

The KSC will help them settle into Singapore first before "scaling up globally to enter a third market together", he added. "Singapore is not just a window to South-east Asia, but also Europe and America."

Technologically advanced South Korea is a prominent start-up hub in North-east Asia, with more than 440,000 tech start-ups alone.

The government has invested heavily in them, setting aside an annual budget of US$1 billion for funding, and a separate US$26 million a year to help firms go global. Five to six thousand start-ups receive government funding every year, said Mr Roh. But only about 500 have ventured overseas.

There are also accelerators like D.Camp, a non-profit organisation backed by South Korean banks, which organise contests and festivals to boost the start-up ecosystem.

TAPPING EXPERTISE

South Korean start-ups want to sell to Indonesia and Thailand, but they have no connections or know-how. But our Singapore start-ups have already gone regional, so they can tap our expertise. 

EMATIC CHIEF FINANCIAL OFFICER SIMON WONG

Peopet's Mr Choi snagged 10 million won (S$11,600) worth of funding during D.Day, an event in Busan organised by D.Camp last November. While this adds to the 300 million won that he had already secured, he said he will need more funding to expand further.

Experts said South Korea - home to 50 million - has a strong manufacturing base and a big pool of talent, but it lacks access to global investors like those in Singapore's financial hub. Strict laws also stand in the way of disruptive business models in South Korea, whereas Singapore is business-friendly and receptive to new ideas.

Mr Lee Jae-hyun, team lead of California-based firm Northern Light Venture Capital, said Singapore offers good infrastructure, a strong legal system, the convenience of doing business and ample government support.

"It makes sense for Korean start-ups to set up base in Singapore and then tap (neighbouring) Indonesia and Malaysia," he told ST. "There's cultural proximity and people (in Asean countries) are friendly and warm up to Koreans."

Mr Kim Hong-il, head of D.Camp, who has worked in Singapore, said South Korean start-ups have a lot of good ideas but are restricted by language, limited funding and a closed economy. "It would be good to link Korea's manufacturing base with Singapore's financial support. Singapore may be a small country but its support for entrepreneurship is better than Korea's," he said.

While there are over 2,100 South Korean companies with a presence in Singapore, South Korean start-ups have not been as active. This could be due to limited awareness about the opportunities in Singapore, said Enterprise Singapore's global markets director for North-east Asia and Oceania, Mr Johnny Teo.

"There is good potential for more South Korean start-ups to do more in Singapore to expand their presence in the region," he told ST. "The KSC plugs the gap as it will provide the infrastructure and networks for South Korean SMEs and start-ups to set up in Singapore."

MSS will work with its Singapore counterparts to select South Korean start-ups suited to set up at the KSC, most likely those specialising in AI, financial technology, clean technology and smart mobility.

Mr Choi Hyun-il (far left), founder of South Korean start-up Peopet, with Busan Mayor Oh Keo-don after snagging 10 million won (S$11,600) in funding during an event in Busan organised by start-up accelerator D.Camp last November. Peopet lets pet owne
Mr Choi Hyun-il, founder of South Korean start-up Peopet, with Busan Mayor Oh Keo-don after snagging 10 million won (S$11,600) in funding during an event in Busan organised by start-up accelerator D.Camp last November. Peopet lets pet owners register their pets and issues them with an identity card (above). PHOTO: PEOPET

The new start-up centre will also offer opportunities for Singapore SMEs and start-ups to break into the South Korean market.

"South Korea is known for its strong pool of tech start-ups that specialise in shared economy, Internet of Things, as well as deep tech (for example, fintech, medtech and foodtech) - which are synergistic with Singapore," said Mr Teo.

"Our companies can therefore explore co-development and commercialisation opportunities, not just for South Korea but also for other markets, including the broader North-east Asia."

Foodtech start-up Zeemart, for one, is keen to introduce its digital procurement platform to South Korean food giants such as bakery chain Paris Baguette. Zeemart chief product officer Keith Tan told ST that the firm's solution can help small food business owners save the hassle of managing finances and allow them to focus on food quality.

Tourism start-up Fooyo is keen to offer its AI-powered solutions to cities such as Seoul and Busan to enhance the travel experience, while Ematic Solutions is confident that its AI-enabled solutions can help South Korean companies optimise their online marketing efforts.

All three firms participated in the Asean-Republic of Korea Start-up Expo held in Busan last November, on the sidelines of the Asean-Republic of Korea Commemorative Summit.

Ematic chief financial officer Simon Wong also sees opportunities in working with South Korean start-ups. "South Korean start-ups want to sell to Indonesia and Thailand, but they have no connections or know-how. But our Singapore start-ups have already gone regional, so they can tap our expertise," he said.

A version of this article appeared in the print edition of The Straits Times on January 21, 2020, with the headline 'Helping S. Korean firms go global - via S'pore'. Print Edition | Subscribe