Korea's artificial intelligence (AI) startups are breaking through the "unicorn barrier" and entering a full-fledged growth trajectory. Upstage, a homegrown generative AI company, secured 180 billion won in the first tranche of its Series C funding round on Wednesday, earning a corporate valuation of 1 trillion won. This marks the birth of the first unicorn, a company valued at more than 1 trillion won, in Korea's generative AI sector. The round drew heavy participation from Silicon Valley venture capital firms and domestic institutions, reflecting high growth expectations.
The advance of AI semiconductors is equally noteworthy. Rebellions, the first direct investment target of the National Growth Fund, raised 640 billion won through a pre-IPO earlier this month, pushing its valuation to 3.4 trillion won. Korea Venture Investment, an early investor, held a ceremony with Rebellions on Tuesday to mark the achievement of a 3 trillion won valuation. FuriosaAI, an AI semiconductor fabless company, is pursuing an independent listing after rejecting an acquisition offer from Meta.
While Korea's AI ecosystem is being credited with meaningful growth, it is too early to celebrate. Domestic startups are suffering a serious funding bottleneck at the scale-up stage. In the early stages of a startup, angel investment and government support provide a cushion, but the funding threshold remains high in the "death valley" phase, when research and development (R&D), talent acquisition, and market entry are desperately needed.
Advanced strategic industries not only take a long time to generate profits but also carry significant risk. Ultimately, the key to success is a "win-win model" in which the private sector and policy finance join hands to continuously supply venture capital. This is why the policy-aligned private equity fund (PEF) model proposed at the "Seoul Economic Daily Invest Forum" held on Thursday is drawing attention. In her keynote speech at the forum, Korea Development Bank Deputy Governor Shin Hye-sook stressed that "(PEFs) must consider not only short-term returns but also the value of an industry's future and its impact on the national economy."
The global AI race has become a "capital war" in which the size of investment directly creates the technology gap. With Google, Meta, and OpenAI pouring in hundreds of trillions of won, Korea cannot afford to rest on the leap of a few startups. The country must build a broader and deeper "investment pool" in which growth finance and policy finance, along with private PEFs and venture capital firms, work in organic coordination. Only when not one or two, but five, 10 or 100 homegrown unicorns emerge will Korea be able to leap into the top three or higher in AI.
