The Korean Venture Capital Association announced on May 8 that Korean venture capitals’ investment in the biotech and medical sectors totaled 49.1 billion won in the first quarter of this year, down 40.8% from a year ago. Meanwhile, their total new investment for the same period hit an all-time high of 397.4 billion won.
Last year, Korean venture capitals put the largest portion of their investment, 22% to be exact, in the biotech and medical sectors. Specifically, their investment in the sectors increased from 105.2 billion won to 146.3 billion won between 2012 and 2013 and then to 292.8 billion won in 2014, 317 billion won in 2015 and 468.6 billion won in 2016. This year, however, the new investment in these sectors has been exceeded by those in logistics service (75.1 billion won), ICT service (71.1 billion won) and popular culture (63.6 billion won).
The increase in the investment in the biotech and medical sectors that continued until last year was because a number of biotech firms went public after the Korea Exchange relaxed listing requirements for them in March 2015. Investors have become rather conservative though since the recent Hanmi Pharmaceutical scandal related to the cancellation of export contracts. On the contrary, the quarterly investment in the logistics service sector showed a year-on-year increase of approximately 40%, led by the growth of O2O logistics and the fourth industrial revolution.
In the first quarter, the venture capitals put a record high of 40.9% of their investment in three-year-old or younger companies. 30.4% and 28.7% of their investment went to those founded more than seven years ago and the rest, respectively. In 2015, the second group took the largest portion of their investment. However, the first group overtook it last year and widened the gap this year.
As of the end of March this year, those Korean venture capitals’ investment resources added up to 18.3244 trillion won and investment cooperatives accounted for 93.9% of the total resources. A total of 24 cooperatives have been newly established with 667.2 billion won since the beginning of this year.