GDIN aims to be Asia's ‘Y Combinator’ for startups
The state-funded GDIN aims to advance the S.Korean startup market with more autonomy from the government.
Jongkap Kim, CEO of the state-funded startup organization Global Digital Innovation Network (GDIN), believes that timing plays a crucial role in the success of businesses. He cited Meta’s acquisition of Instagram as a prime example. Had the social media firm not placed a $1 billion bet on the photo-sharing service in 2012, he said, other tech companies such as Google, Microsoft or Yahoo might have bought it. This scenario could have resulted in Meta losing its leadership in the social media realm.
“In the fourth revolution industry driven by AI, being first is essential as a winner takes it all,” Kim told The Miilk in a recent interview at GDIN’s headquarters in Pangyo, south of Seoul.
Kim said now is the time for GDIN to play a key role in elevating the local market. This involves helping local startups to go global and attract global companies to increase their presence in Korea.
However, Kim said that the South Korean market, as is, operates under different rules, with a greater focus on acquiring startups at the lowest possible cost rather than on timing. There’s tendency to avoid taking high risks by acquiring promising yet still-unprofitable startups. Even venture capital firms specializing in startup investments tend to prioritize short-term returns over providing ongoing support through the ups and downs of a startup’s journey. Additionally, the relatively low competition in the market is hindering its advancement. In the IT sector, Naver and Kakao are nearly the only companies capable of making substantial acquisition deals. Consequently, startups are often undervalued due to limited competition in bidding process. If an M&A deal with one of these tech giants falls through, the other doesn’t even consider it as they deem the deal unworthy.
Kim emphasized the need to recognize the time and effort that startups has long invested in developing their services and products, which is often overlooked in their valuation. He criticized the outdated evaluation methods used for decades by conglomerates, which focus solely on anticipated profits.
“When the Korean startup sector advances to the next level with 10 tech companies as large as Kakao or Naver, more accurate evaluations of startups will become possible,” he said.
