Localization is key for startups’ global expansion: Venture experts

The 2nd ‘K-Venture Renaissance Forum’ held at Seoul National University of Science and Technology on the 23rd. (Lee Seung-hwan)

Thorough research on local competitors is essential for South Korean startups to successfully enter overseas markets, according to Jiro Kumakura, general partner at Japan‘s major venture capital (VC) Global Brain Corp.

“Korean startups may face significant challenges and may not be able to recoup investments if they fail to adequately investigate whether there are already startups or large corporations operating similar businesses in the target country,” Kumakura said, during the Global VC Talk Show of the K-Venture Renaissance Forum on Monday.

The forum was held at the Techno Cube of Seoul National University of Science and Technology (SeoulTech) in Nowon District, northeastern Seoul.

Kumakura also stressed the importance of a local network that is familiar with the target country’s unique culture and communication style when startups enter overseas.

Global Brain manages a global fund of approximately 2.4 trillion won ($1.8 billion). It entered the Korean market in 2012 and its investments total about 30 billion won.

Ee Ling Lim, head of global strategy at 500 Global, a major U.S. accelerator (AC), who joined as a panelist at the show, emphasized the importance of primarily assessing whether there is a market in the target country for the product they intend to sell.

She noted that it is crucial to think from the perspective of local consumers, given the experience of taking Korean startups to the United States and Saudi Arabia,

“We once brought a Korean startup in the dental hygiene field to the U.S.,” she said. “Americans don’t use mouthwash as frequently as Koreans; instead, they tend to chew gum.”

She emphasized that “it is essential to carefully evaluate whether your product fits the local market and whether there will be customers who will accept it.”

She also stressed that “wherever you go, you must localize your product to make it familiar to the local consumers, and it is equally important to effectively use local connections to introduce your business persuasively.”

Another piece of advice given at the event was to consider “starting a business abroad” rather than simply “expanding into overseas markets.”

If the customers are in the U.S., for example, it may be best to operate the business there.

Will Lee, head of startup ecosystem for East Asia at Amazon Web Services Inc. (AWS), noted that investors will not wait forever.

“To succeed in the global market within a short period of four to five years, you should consider starting your business directly in the target country from the beginning,” he said.

The K-Venture Renaissance Forum, co-hosted by Maeil Business Newspaper, SeoulTech, the Korea Venture Business Association (KOVA), and the Korea Business Incubation Association (KOBIA), took place for the second time this year to revitalize the domestic venture ecosystem.

The latest forum, themed “Overseas Expansion of Startups, Global Venture Investment, and Networks,” featured over 150 participants, including Vice Minister of SMEs and Startups Kim Sung-sup, SeoulTech President Kim Dong-hwan, KOVA Vice President Hwang Sung-kwan, KOBIA Chairman Lee Kwang-geun, Chairman Yoon Mi-ok of the Korea Venture Business Women’s Association (KOVWA), and Chairman Yoon Gun-soo of the Korea Venture Capital Association (KVCA), along with other distinguished guests and university students interested in entrepreneurship.

SeoulTech, the venue for the event, oversees various startup support programs such as the Ministry of SMEs and Startups‘ preliminary startup package, early-stage startup package, and global corporate collaboration programs.

The university also leads efforts to support technology and new industry startups with an annual fund of 15 billion won.

“The K-Venture Renaissance Forum is a meaningful platform that heralds a renaissance for Korean startups on the global stage,” said SeoulTech President Kim Dong-hwan, adding that the forum focuses on creating global networks and connecting domestic and international startup ecosystems to foster the growth of startups.

“We need to go beyond simply sharing knowledge about entrepreneurship and create a practical platform where private, public, industrial, and academic sectors collaborate to drive changes in the startup ecosystem,” Kim added.

A practical platform refers to not only providing a forum for discussion but also deriving specific collaboration methods and actionable projects, thereby strengthening support for startups and linking investments, according to Kim.

Vice Minister Kim Sung-sup noted that the venture ecosystem is responding to macroeconomic changes such as reduced liquidity supply, continued high-interest rates, and the rapid development of deep tech, including artificial intelligence (AI).

“Our country’s innovative venture startups have made a strong presence on the global stage, solidifying their position as a pillar of the Korean economy,” he said.