According to the Financial Services Commission, a total of 116 small and medium-sized enterprises (SMEs) and venture firms in South Korea financed 18 billion won (US$15 million) during the first year of crowdfunding in the country and the ratio of successful financing reached 46.4%. For reference, the percentage was approximately 20% during the early stage of crowdfunding in the United States.
During the one-year period, 7,172 investors participated in the crowdfunding with individual investors accounting for 93% of the total. The average investment per individual investor was 1.33 million won (US$113,000). The companies procured the money in 121 different cases and 56 of the cases led to public financial institutions’ follow-up fund investment amounting to 9.93 billion won (US$8.49 million).
The initiation of this new type of funding aroused much interest in the culture industry in particular. For instance, crowdfunding investors put 700 million won (US$598,000) in Pandora, a film released in December last year, to reach the upper investment limit previously set for the film.
The Financial Services Commission is planning to revise the Capital Markets Act to reduce crowdfunding advertising regulations. In addition, it is going to establish a network providing data and information on crowdfunded companies.