– “Money flow has been thawed”… Amidst the recovery in venture investment, AC is evolving into a “company builder.”
The Korean venture investment market broke its long lull and began a marked recovery in 2025. According to data from the Ministry of SMEs and Startups and the Korea Venture Capital Association, cumulative new venture investment reached 9.8 trillion won in the third quarter of this year, a 13.1% increase year-on-year. While the easing of investor sentiment, which had been frozen since 2022, has alleviated the "hardening of the money supply," the positive momentum has been concentrated in specific deep tech sectors, such as AI and system semiconductors, resulting in a "hyper-polarization" trend.
The most notable characteristic of this recovery is the surge in private capital. As of the third quarter, the private sector accounted for 83.4% of venture fund investors, a record high. Unlike the past, where government-backed funds served as a catalyst, financial institutions and corporate venture capital (CVC) firms run by large corporations are emerging as the "big players" in the market, redefining investment standards.
The link with global trends was also evident. In the first quarter of 2025, global venture investment recovered significantly, reaching approximately $113 billion on a quarterly basis, riding the AI boom. According to market research firm Gartner, global semiconductor revenue is projected to reach $717 billion (approximately KRW 1,000 trillion) in 2025, a 14% year-on-year increase driven by the surge in demand for AI infrastructure. Domestic private capital is also responding to this global trend by focusing its funding on hardware and infrastructure technology companies with immediate profitability.
Deep tech investment enters a 3 trillion won era.
Domestic deep tech investment has increased significantly year-on-year, reaching around 3 trillion won annually. This represents a simultaneous quantitative recovery and qualitative reallocation of funds. Venturesquare's internal follow-up investment records also reveal numerous transactions at the Pre-A, Series A, and Pre-IPO stages, with follow-up investments in technology-focused startups particularly active.
Shifts in investment patterns are also noteworthy. The nature of funding is shifting from short-term returns to long-term investments focused on R&D and validation. The explosive growth of the AI inference chip market has opened up a window of opportunity for domestic fabless companies, leading to system semiconductor startups like Rebellion and Furiosa AI attracting large-scale investments and achieving unicorn status.
An investment manager at a large VC firm said, “Recently, when investing in a fund, LPs (investors) are focusing on whether the company has a clear ‘AI transformation’ strategy or whether it can build a portfolio with a high proportion of global sales.” He added, “It’s difficult for companies that are simply domestic platforms or at the idea stage to even pass the investment review committee.”
Can accelerators transform into "venture studios"?
The accelerator (AC) industry, which handles early-stage investments, is actively restructuring itself to ensure its survival. Beyond the traditional approach of simply selecting promising startups and providing seed funding, the "venture studio" or "company builder" model, which directly develops ideas, assembles management teams, and launches them, has become the dominant model for 2025.
As the technological complexity of deep tech increases, accelerators are increasingly involved as "planners" and "co-founders" to commercialize the core technologies of university research labs and corporate in-house ventures. 2025 marked the year accelerators expanded their functions beyond simple mentoring and seed investment to focus on "field proof of concept (POC), B2B connections, and overseas networks."
The second-term programs of accelerators based on large corporations and telecommunications companies have been systematically structured, encompassing everything from mentoring and promotion to commercialization support. Private-sector-led global networking has also increased practical connections with overseas venture capital firms and accelerators. Accelerators are focusing on field-focused demos and proof-of-concepts (PoCs) as the core of their programs, further strengthening their links to follow-up investments and overseas expansion.
Investment polarization and the deepening "winner-takes-all" effect
Despite the recovery, investment polarization has deepened. While large-scale funding has poured into core deep tech sectors like AI and semiconductors, traditional startup models like B2C platforms and brokerage services have struggled to attract investment. Domestic vertical platforms, having lost their price competitiveness due to the ultra-low-price offensive of Chinese e-commerce platforms like AliExpress and Temu, have failed to attract additional investment and are now facing the threat of bankruptcy.
The closure of Encode, a prestigious platform that had received a combined investment of 23.5 billion won, and Jandisoft, a mid-sized gaming company, shocked the industry. Twenty-three companies selected for TIPS this year have gone out of business, highlighting the harsh reality that even with technological prowess, survival is impossible without cash flow management and a proven business model.
Evidence as a Competitiveness Indicator… A New Standard for Follow-up Investment
In the startup sector, the path of "user-based verification → PoC → overseas partnership → follow-up investment" has become standard. The follow-up investment and pre-IPO cases observed by Venturesquare support this trend. For AI and deep tech startups in particular, data and verification capabilities have become key criteria for attracting investment.
As accelerators at large corporations serve as commercialization channels for startups, it has become easier for early-stage companies to "acquire real demand customers." This means it's now essential for startups to move beyond the simple idea stage and develop a proven business model in the real world.
A venture capitalist said, “2025 is a turning point when domestic capital and policy begin to bet on the ‘long-term value of technology.’” He added, “While the policy direction is clear, without consistency in execution and simplification of administrative procedures, the changes felt on the ground will be limited.”
Global technology funding flows to continue through 2026.
As long as the global technology funding flow continues, long-term investment in Korea's deep tech stack (data, infrastructure, and talent) is expected to steadily increase. If evidence-based collaboration between accelerators, VCs, and startups is properly aligned with the government's structural financial reforms, Korea's deep tech and AI ecosystem is likely to enter an even higher growth trajectory after 2026.
The aforementioned VC reviewer predicted, “2026 will be a year in which ‘selectivity’ in investment will be strengthened rather than liquidity of funds,” and “While an increase in technology-based unicorns and scale-ups is expected, they will struggle to survive if they cannot demonstrate a clear exit strategy and technological moat.”
If 2025 marked the year the market regained its fundamentals, 2026 will be the year to test whether the recovered funds can translate into tangible "global performance." As a private-sector-led venture ecosystem takes hold, startups will likely need to demonstrate clear recovery strategies and technological strengths to survive, rather than relying on government subsidies.
Accelerators will position themselves as "test-scale-up platforms" that serve both as early-stage investment pipelines and global business development hubs, and their success stories will influence the design of public-private partnership programs. Investors' expectations will become increasingly demanding, and "global expansion" will no longer be a mere slogan; it will become a prerequisite for survival.