As of 2023, the number of startup companies in Korea has grown for three consecutive years, signaling an expanding entrepreneurial base. According to the Ministry of SMEs and Startups and the Korea Institute of Startup & Entrepreneurship Development, there were 4.902 million startups, accounting for 59.1% of all SMEs. This growth was primarily driven by tech-based sectors and entrepreneurs in their 20s and 30s, with notable increases in information and communications, professional, scientific, and technical services, and education services. Non-tech sectors such as electricity, wholesale and retail, and agriculture also saw a rise in startup numbers.
The total number of employees in startups was 8.33 million, representing 43.6% of all SME employees, but this figure fell by 2.2% compared to the previous year. Tech-based startups employed 2.499 million people (30.0%), with an average of 2.6 employees per company. Total revenue for all startups reached KRW 1,134.6 trillion, a 4.3% decrease year-on-year, while tech-based startups generated KRW 320 trillion (28.2%). The average revenue per startup was KRW 230 million, highlighting the challenging business environment.
The survey found that 83.2% of founders leveraged previous work experience to start their businesses, and 29.0% had experience with restarting after failure. The biggest challenge during the startup process was securing funds (53.7%), followed by fear of failure (45.9%) and lack of knowledge or experience (36.7%). The main motivation for starting a business was higher income (64.8%), with the average required capital being KRW 206 million, mostly sourced from personal funds (95.2%). Bank and non-bank loans, private borrowing, and government financing were also utilized.
Startups reported an operating profit margin of 5.7% and a net profit margin of 4.2%, indicating limited profitability, while only 2.7% had overseas business experience, a slight decrease from the previous year. The average number of industrial property rights held by startups increased to 5.0. The Ministry of SMEs and Startups plans to inject a record KRW 3.5 trillion in 2026 to support startup recovery and growth. Detailed findings are available on the KISED website.
The 2023 trends in Korean startups reveal both quantitative growth and qualitative challenges. While the expansion of tech-based and youth entrepreneurship signals innovation and potential job creation, declining revenue and employment figures reflect a tougher business climate amid economic uncertainties. With the government set to provide unprecedented support, the effectiveness of these policies and the qualitative advancement of the startup ecosystem will be closely watched. Addressing structural issues such as funding, resilience after failure, and global expansion will require targeted support and innovative strategies.