Korean startups heading overseas should eye on Japan: D.Camp CEO

Kim Young-duk, chief executive officer of D.Camp [Photo by Park Hyung-ki]

South Korean startups that are eyeing overseas markets should consider Japan given the proximity and vast opportunity it brings, said Kim Young-duk, chief executive officer of D.Camp, a startup accelerator funded by the Banks Foundation for Young Entrepreneurs.

“Japan is close to Korea geographically and psychologically,” Kim said, in a recent interview with the Maeil Business Newspaper. “Given that Korea is believed to have more competence in terms of innovation, companies will be able to reap huge growth if they enter the market.”

D.Camp is the country’s largest startup support agency founded in 2012 by 19 financial institutions. The accelerator offered indirect investments to about 3,500 startups including unicorns such as Ddanggeun Market Inc. and Viva Republica Inc.

Ever since Kim joined D.Camp in 2021, he has been placing focus on the globalization of Korean startups.

“The level of Korean startups has grown considerably, and we believe they have a chance to compete with overseas players,” Kim said. “I am particularly eyeing Japan.”

The CEO noted that Japan is often regarded as simply an aged and low-growth country by many people but Kim believes the market has high potential given its population of over 120 million people and a fairly high level of income.

“Japan is known for their systematic and manual-oriented approaches, and has a solid infrastructure expected from an advanced economy,” Kim said. “Although the country is often perceived as slow when it comes to embracing change, this can be an opportunity for Korean startups that excel in innovation.”

Kim added that Japanese customers tend to have a relatively higher appreciation for paid services compared to those in Korea and China, and there is a culture of maintaining long-term relationships once established.

D.Camp provides expert consulting services for startups seeking opportunities in Japan.

Based on an agreement signed with the Japanese counterpart Finolab Inc., a fintech innovation center, D.Camp assists in the localization process of Korean startups in Japan.

D.Camp also has its staff residing in Japan to strengthen its network there. All these measures are taken with an aim to build a platform that can help Korean startups adapt quickly to the unfamiliar market.

Alongside its support for companies aiming to expand globally, D.Camp has also made direct investments in 22 startups by May, already surpassing its investments in 21 companies last year.

It is noticeable considering the dampened investment sentiment in the venture industry since last year, driven by interest rate hikes, recession fears, and the prolonged Russia-Ukraine war

According to data from Startup Alliance, investments in Korean startups totaled 3.78 trillion won ($2.9 billion) in the second half of last year, down by more than 40 percent.

“We are aiming to increase the number of direct investments to 50 this year,” Kim said. “The amount of indirect investments exceeded 20 billion won last year, more than tripling from 2021,” he added.