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S. Korean startups shine amid coronavirus recession

Virus pandemic hasn’t dampened investor spirit

A Seoulite uses Nephron, a reverse vending machine developed by recycling solutions maker Superbin, to recycle plastic bottle in return for financial rewards in Yeouido, Seoul. (Superbin)
A Seoulite uses Nephron, a reverse vending machine developed by recycling solutions maker Superbin, to recycle plastic bottle in return for financial rewards in Yeouido, Seoul. (Superbin)

While nearly all industries have been affected by the lingering coronavirus pandemic, South Korea’s startup scene is showing resilience with local startups successfully attracting funds.

Superbin, a startup that develops solutions for recycling plastic debris, announced this week that it raised 20 billion won ($16.8 million) in Series B funding recently.

Investors participating in the funding round included portal giant Naver-backed investment firm TBT and set-top box maker Humax, both of which had already taken part in the previous investment rounds, as well as local asset management firm Fine Investment.

Sae-a Global CNS also partook in the funding scheme as a strategic investor. It hopes to use plastic collected via Superbin’s solutions in garment manufacturing.

“Superbin completed the latest funding round in a bid to expand its business scope,” said CEO Kim Jeung-bin.

“Companies from petrochemical and beverage industries are still showing keen attention to the recycling startup, hoping to make direct or indirect investments.”

The Bundang-headquartered startup, now valued at 100 billion won, has rolled out a reverse vending machine called Nephron, which gives financial rewards to people who recycle plastics.

Amid growing awareness about the environment, companies focusing on environmental, social and corporate governance have built momentum in recent years.

“The latest fund raising shows that Superbin’s innovative model, which turns waste into useful materials, has proved promising and sustainable for investors,” said Byun Dae-kyu, Superbin chairman and CEO of Humax.

The startup is not the only company that has surprised the market by attracting significant investment funds amid the virus crisis.

The travel and airline sectors have also taken the brunt of the coronavirus impact. But Myrealtrip, which sells overseas travel packages, successfully attracted 40 billion won late last month. Since its inception, the company’s total investments amount to 82.4 billion won.

Together with local investment firm Altos Ventures as lead investor, the startup’s existing investors IMM Investment and Smilegate Investment participated in the latest funding while the Korea Development Bank, Axiom Asia Private Capital, Partech Partners and Tekton Ventures newly invested in the travel startup.

Myrealtrip CEO Lee Dong-gun said that shifting the company’s focus from overseas products to local ones during the coronavirus pandemic hit the nail on the head.

“The sales in the domestic market nearly quadrupled in recent months, compared to the pre-coronavirus period,” CEO Lee said.

The number of flight and accommodation bookings in April dropped to 40, compared with more than 10,000 in January this year. Swiftly changing its gears, the company, with more than 90 percent of travel products linked to overseas markets, started to focus on the domestic market. Its local travel packages now appeal to people who prefer a getaway within Korea to a trip overseas.

Global investors are more interested in investing in travel startups than local investors, as they expect the segment will recover fast when the coronavirus crisis starts to ease, according to the company.

Riid, an online educational platform operator, is another company that has made the most of the momentum created in educational tech, a business area that has been thrust into the limelight thanks to growing interest in non-face-to-face learning.

It attracted 50 billion won last month from investors including KDB, Nvestor, IMM Investment and Intervest.

Founded in 2014, it offers tutoring services for people preparing for English tests in Korea and recently started deploying artificial intelligence to advance its educational platform.

“The need for practical and effective non-face-to-face educational solutions is on the rise, not only in the education sector but also in other industries,” said Jeon Jin-whan, a director at Intervest.

The edutech firm, which runs an AI lab in Silicon Valley, said earlier this year that it would roll out new services and expand its global partnerships.

With the Korean government’s efforts to prop up the reeling economy, startups with differentiated business models and technology will continue to gather steam despite the coronavirus crisis, according to market watchers.

By Kim Young-won (