Imagine a new Korean drama is in the works, but to bring it to life the producers need funding. How fast would your little sister hit that ‘fund’ button if it were available? Thanks to eased government regulations that button is now a reality for crowdfunding fans in Korea and beyond.
In 2015 several Korean crowdfunding campaigns achieved huge results on US-based sites, like YOLK’s USD $1 million campaign on Kickstarter. Now Korean startups have a number of local options to raise funds for projects ranging from creative arts to technology.
In July 2015 the Korean government passed a bill to legalize crowdfunding platforms and with it boost economic growth. Until the regulatory changes early-stage startups could not ask for small investments in exchange perks (products). Depending on which source is cited, there are now between 20 to 30 platforms launched in Korea, leading to an explosion of newly funded projects.
What do the regulatory changes actually mean for the future of Korea’s entrepreneurs?
In the past Korean entrepreneurs have had to sell their products to larger companies, like Samsung and LG, in order to secure vital funding and to successfully execute production as well as cross-border marketing and distribution.
Eric Cornelius, Co-founder of G3 Partners which provided PR and marketing support for several crowdfunding campaigns in 2015, said that through crowdfunding small businesses in Korea have finally found a way to sell their products directly into western markets. “The success of Kickstarter projects, such as YOLKs USD $1 million dollar campaign proves that crowdfunding platforms are a great way to reach out further,” he said.
He believes that while Korea’s crowdfunding scene is still in its infancy it is likely to see significant growth in the coming years as more local companies realise its advantages.
Here’s our pick of the top Korean crowdfunding success stories from 2015 and some of the local platforms to watch for as we head into 2016.
1. Solar Paper by YOLK
In 2012, Sen Chang, then a fresh graduate from the School of the Art Institute of Chicago, set out on a mission to bring portable solar power to everyone. Based out of Seoul, Korea, but headquartered in Chicago, her company, Yolk, is fulfilling that mission. in 2015 the team launched their second product, Solar Paper, on Kickstarter. Chang says it is the world’s smallest and lightest portable charger in the world, watt-for-watt.
The campaign was a massive hit, raising over a million dollars. As one of the most successful solar projects on Kickstarter, the story was shared on over 250 media channels, including the BBC’s Click, CNBC and Mashable.The personal touch of YOLK founder Chang, who still writes campaign updates in the first person, makes it stand out of from others. Beyond the merits of the product, returnee-backers have been a key element in Solar Paper’s crowdfunding success. “We’ve received a resounding welcome back to Kickstarter from our fans. Not only are they coming back for the second generation device, they’re even buying additional units for friends and family,” Chang said. Scrolling down their Kickstarter page, this is evident in dozens of messages of support.
Solar Paper saw huge technological and design improvements on their first product SolarAde and we are looking forward to see what comes next from YOLK.
2. Looncup by Loon Lab. Inc
Get geeky about your period. Looncup is, according to the company’s own description, the world’s first smart menstrual cup. Ordinary menstrual cups have been around for many years, and have found a following among women who want a more environmental friendly solution than disposable pads and tampons. Made of medical grade silicon, Looncup makes use of sensors to improve upon the shortcomings of ordinary menstrual cups, precisely tracking the wearer’s fluid volume, fluid color, and analyze her cycles.
The company, which raised more than US$160k on Kickstarter to make its product a reality believes that “each tiny Looncup can make a huge impact on the lives of women around the world.” Beyond the success of the campaign, the menstrual cup has gained widespread praise so far, including features in Tech Crunch, Fortune, and Fast Company.
3. WAY by WayWearable
Moisturizing is the first and most important step in keeping your skin healthy and youthful, but not many people are aware of how dry their skin actually is. With a single device and connected mobile app, WayWearable is looking to revolutionize the personal skincare market.
Combining rich data from years of experimentation with a number of existing technologies, WayWearable developed WAY, a small donut-shaped device, that analyses your skin condition in just three seconds and connects to your smartphone. The service helps customers monitor and protect their skin from UV radiation and atmospheric conditions. More effective, personalized management of skincare routines means prolonging the youthfulness of your skin and improving overall health.
With its crowdfunding campaign on Indiegogo the skincare gadget raised over US$130k in 2015, 243% of their original goal.
4. ALEX by NAMU
January has not even finished and there is another Korean based crowdfunding campaign on Kickstarter that has gotten off to a great start. Launched on January 19th, the campaign has raised over USD $25k within 48 hours. 24 days remain on the campaign.
Namu is a team of biomedical engineers who developed wearable posture tracker ALEX. The service, comprising a wearable and connected smartphone app, promises to ease the health concerns associated with ‘text neck’ and ‘forward head posture’. The wearable is a small module which sits lightly on the back of your neck, precisely tracking the angle of your neck, in real time. When you adopt poor posture for more than a couple of minutes (the length of time and vibration strength can be adjusted) it gently reminds you to sit up straight. Posture improvements can be tracked over time on the app.
While many haven’t heard of the condition, ‘text neck’ affects around 80% of office workers and is the result of increased time spent hunched over laptops, smartphones and tablet PCs. Other remedies, such as massage, exist to relieve back and neck pain, but they don’t address poor posture, the root of the problem. ALEX coaches better posture and the team at NAMU hope to relieve the short term discomfort of stiff necks as well as the more serious long term impact on your neck and spine.
Founded in 2011, tumblbug is Korea’s largest and fastest growing online crowdfunding site and the leader in art and cultural content. Tech in Asia notes that the success has led to a US$1.5 million series A funding coming from Korea’s largest online portal Naver, California-based seed fund Strong Ventures and DCM. With the slogan “get smart, fund art” tumblbug helped to fund over US$40 million for artists, filmmakers, musicians and game developers.
Tumblbug is the birthplace of several award-winning movie and music projects such as the Sundance Film “Jiseul” and “The King of Jokgu.” Another fast growing category on tumblbug is games. Tumblbug is said to be a major source for funding in Korea’s indie game industry. At the time of writing there are over 200 active game projects.
Wadiz, the SNS-based crowdfunding website, provides a platform for small businesses and startup events that need funding and enables investors to meet and share the same value. Since its establishment in 2015 Wadiz earned more than US$3 million from investors so far and supported 1500 crowdfunding projects. Its funding success rate of seventy percent is highly above other major crowdfunding players, such as Kickstarter and Indiegogo from the United States.
David Shin, CEO of Wadiz, believes that crowdfunding can change people's lives. For a better understanding of investment strategies, Shin also established the Crowd Research Institute, which analyses and compares successful crowdfunding platforms and campaigns all over the world.
In Wadiz’s hall of success are campaigns such as Lab Nosh, a healthy meal in a bottle concept, and Begin Again: Youngchul Burger, a project to revive a once famous burger chain in Korea.
Hallyu, the global boom of Korean pop culture, has helped establish the Korean nation and its army of rising stars as a global force.
Founded in 2015, MakeStar has developed a platform that focuses on enhancing the content and appeal of Korean entertainment, including TV dramas, movies, and K-pop music. MakeStar examines every fundraising application and effectively markets projects through social media and third party website to attract backers. Popular projects range from funding girl groups to album productions.
Founded in May 2012, Opentrade, has created the first of its kind equity crowdfunding platform in Korea. What stands out about the platform is that companies can directly browse for angel investors, venture capitalists, and business supporters to share their plans and communicate. On the other side investors can evaluate each company’s growth for investment opportunities. They can compare it with other projects as the platform provides a standard template through which business plans are shared.
Rather than getting perks like products or T-shirts, backers get actual equity in the company. Startup companies on Opentrade range from Counsring Inc, a mobile mental counseling service to Make Miracle, a company that uses edutainment (education + entertainment) to support social charity work.