Commerce collapses under the onslaught of c-commerce… The brutal story of "separating the wheat from the chaff" in the startup ecosystem.
The startup ecosystem of 2025 can be summarized as "the hardware counterattack" and "the platform's decline." While B2C platform companies, which had dominated the market for years, struggled with declining profitability and stagnant growth, deep tech companies armed with advanced technological capabilities filled the void. This, coupled with the global AI infrastructure investment boom, signifies a restructuring of the Korean startup landscape from a software-centric one to one centered on hardware and infrastructure.
AI semiconductor startups join the ranks of unicorns.
Most of the unicorn companies (valued at over 1 trillion won) launched this year are in the system semiconductor and AI sectors. Rebellions raised approximately 350 billion won in its Series C round, surpassing a valuation of 2 trillion won. FuriosaAI also joined the ranks of unicorns by securing 170 billion won in funding. Upstage is also on the verge of becoming a unicorn, penetrating the B2B market with its lightweight language model (sLLM).
Their success carries significance beyond simply increasing corporate value. According to global market research firm IDC, the global semiconductor market is expected to experience double-digit growth by 2025, driven by the expansion of AI infrastructure adoption. In particular, the explosive growth of the AI inference chip market has opened up a window of opportunity for domestic fabless companies.
Rebellion is attracting attention from global big tech companies with its development of the "ATOM," an AI accelerator chip for data centers, while Furiosa AI is expanding its presence in the autonomous driving and robotics sectors with its "RNGD" edge AI chip. Upstage is rapidly growing in the enterprise AI solutions market, securing large domestic and international clients.
Hardware Renaissance…Technical Difficulty Competitiveness
2025 demonstrates the arrival of an era where "technological difficulty" directly translates into "competitive advantage." While rapid market entry and network effects were once key to startup success, now inimitable, original technology and long-term R&D investment are essential.
Developing AI semiconductors requires initial investments of hundreds of billions of won and years of development time. Even during mass production, close collaboration with foundries (semiconductor contract manufacturing) is required. However, once proven in the market, private investors are focusing their funds on deep tech despite the high risk, as it allows them to build a "technological moat" that competitors cannot easily match.
Among follow-up and pre-IPO cases observed by Venturesquare, large-scale investments in hardware and infrastructure technology companies were also prominent. As the "user-based verification → PoC → overseas partnership → follow-up investment" cycle becomes standardized, only companies with robust data and verification capabilities are successfully attracting investment.
Winter on the Platform and the Domino Effect of Closures
Meanwhile, the commerce and brokerage platform industries have faced severe challenges. The closure of Encode, a premium platform that received a total investment of 23.5 billion won, and Jandisoft, a mid-sized game company, dealt a significant blow to the industry. Domestic vertical platforms, having lost their price competitiveness due to the ultra-low-price offensive of Chinese e-commerce platforms like AliExpress and Temu, failed to attract additional investment and were pushed to the brink of bankruptcy.
In fact, 23 of this year's TIPS companies have closed, highlighting the harsh reality that even with technological prowess, survival is impossible without cash flow management or a proven business model (BM). B2C platform companies, in particular, are caught in a vicious cycle of declining profitability, with customer acquisition costs (CAC) steadily increasing while customer lifetime value (LTV) stagnates.
“2025 was the year the bill was paid after the party,” said a venture capital firm representative. “The liquidity party of the past few years is over, and now you have to prove real profits and growth to get investment.”
Coupang's woes, the onslaught of c-commerce… the crisis facing domestic commerce.
The onslaught of e-commerce went beyond simple price competition and exposed structural problems in the Korean commerce ecosystem. Chinese platforms leveraged their extensive manufacturing infrastructure and logistics networks to drastically cut out intermediaries and establish direct-to-consumer sales structures. This fundamentally threatened the value that domestic intermediary platforms could provide.
Furthermore, e-commerce platforms have rapidly attracted younger consumers by maximizing customer experience through AI-based recommendation algorithms and social media integration. Domestic platforms have responded by emphasizing differentiated curation and brand value, but this has proven inadequate in a market with high price sensitivity. Coupang's recent massive data breach and ongoing conflict with authorities are entering a new phase, extending beyond the end of the year and into the new year.
The Tougher IPO Market and the More Flexible Changes in Large Corporations
The initial public offering (IPO) market has also become increasingly stringent. Following the "Padu incident," the Korea Exchange tightened its screening for technology-specific listings, leading to a surge in voluntary withdrawals. Padu, an AI semiconductor company, attempted to obtain a technology-specific listing, but controversy arose during the performance and technology verification process, ultimately leading to the cancellation of the listing. This led to a reexamination of the technology-specific listing system itself.
However, companies with proven track records and technologies, such as NWC, are successfully entering the stock market, and a process of separating the wheat from the chaff is underway. NWC, recognized for its competitiveness in the global market for its power semiconductor technology, successfully went public and maintained a stable stock price trend even after listing.
Meanwhile, large corporations like Samsung Electronics and Hyundai Motors are offering a new way to survive by strengthening their "open innovation" strategy, which goes beyond simple investment and integrates startups into their supply chains. A win-win structure is forming, where large corporations leverage startups' technologies to accelerate innovation, while startups leverage the large corporations' sales channels and resources to achieve stable growth.
Proof-of-concept and partnerships are the keys to survival.
In the startup sector, the path of "user-based validation → proof of concept → overseas partnership → follow-up investment" has become standardized. For AI and deep tech startups in particular, data and validation capabilities have become key criteria for attracting investment.
As accelerators and telecommunications companies, including large corporations, have become more systematic in their support of commercialization, it has become easier for startups 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.
“In the past, attracting investment was a measure of success, but now securing actual customers and achieving sales are more important indicators,” said one startup founder. “Investors also demand empirical data and customer references rather than just ideas.”
The party's over, the hangover lingers, but the sun still rises.
"2025 was the year we received the bill after the party," said one venture capitalist. As one venture capitalist put it, the liquidity party of the past few years is over. 2026 will be a year of "proof," not just survival.
Only companies with the capacity for "global scale-up" that transcends the limitations of the domestic market and a business model that generates tangible profits even amidst the AI bubble will be crowned the next unicorn. The restructuring centered on hardware and deep tech represents the Korean startup ecosystem's evolution from "rapid imitation" to "independent innovation," and this is expected to lead to qualitative maturity in the ecosystem in the long term.
However, opportunities still exist for platform companies if they can offer differentiated value. Beyond simple brokerage, the possibility of a new platform emerging that combines curation, community, and brand value cannot be ruled out. Ultimately, the winners after 2026 will be those companies that possess technological prowess, market fit, and the ability to expand globally.