100 Billion Club

CEOs of venture firms which surpassed 100 billion won (US$87.76 million) in sales pose for a photo with The Small and Medium Business Administration (SMBA) head Joo Young-sup (center).
CEOs of venture firms which surpassed 100 billion won (US$87.76 million) in sales pose for a photo with The Small and Medium Business Administration (SMBA) head Joo Young-sup (center).

 

The Small and Medium Business Administration (SMBA) and the Korea Venture Business Association (KOVA) held a ceremony for venture businesses at Imperial Palace Hotel Seoul on July 21 to encourage new venture firms surpassing 100 billion won (US$87.76 million) in sales last year.

According to an analysis by the SMBA and the KOVA on the same day, the number of startup ventures that posted sales of 100 billion won (US$87.76 million) in 2015 was 474, up 14 companies from 460 a year ago. The figure was increased by 3 percent compared to 1.5 percent from the previous year. It is also a sevenfold increase in 10 years from 68 companies in 2005. The number of new venture firms that turned over 100 billion won (US$87.76 million) for the first time last year amounted to 55. 

The combined sales of the 474 venture businesses last year reached 101 trillion won (US$88.64 billion) and the figure surpassed Korea Electric Power Corporation (KEPCO), the nation's fifth-largest conglomerate.

Six venture firms – Coway (2.16 trillion won or US$1.9 billion), Naver (2.13 trillion won or US$1.88 billion), Sungwoo Hitech (1.25 trillion won or US$1.09 billion), Yura Corporation (1.22 trillion won or US$1.07 billion), STX Heavy Industries (1.05 trillion won or US$920.05 million) and Humax (1.04 trillion won or US$910.93 million) – surpassed 1 trillion won (US$877.58 million) in sales last year as the previous year.

The average sales of ventures that posted sales of 100 billion won (US$87.76 million) stood at 212.9 billion won (US$186.84 million). The figure slightly decreased from 215.1 billion won (US$188.77 million), but its operating profits and operating profit margin increased. Their average operating profits totaled 16 billion won (US$14.04 million), up 1.5 billion won (US$1.32 million) from 14.5 billion won (US$12.72 million) a year earlier. The rate of their return on sales was 7.5 percent on average, showing an increase from 6.7 percent in 2014. 

The SMBA and the KOVA attributed the reason for the fact that the start-up enterprises record sales of more than 100 billion won (US$87.76 million) through their continued investment in R&D and efforts to secure technologies, including industrial property rights, along with their strategy to enter the global market. Out of 474, 200 firms attracted venture capital after the founding and 57.4 percent of them overcame difficulties experienced in the early stage with the investment within seven years after the founding. It took 17.4 years on average for the firms to achieve more than 100 billion won (US$87.76 million) in sales after the founding. Seven venture businesses recorded sales of 100 billion won (US$87.76 million) within seven years after the founding.

The proportion of R&D to sales for venture firms with sales of 100 billion won (US$87.76 million) was 2 percent on average, higher than the figure for SMEs (0.8 percent), or large companies (1.4 percent). The venture businesses reported 52.9 billion won (US$46.42 million) in exports on average each, which made up 24.9 percent of the total sales.

 

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