Unicorn is a privately held startup with an enterprise value of $1 billion or more. The number of unicorn companies has increased dramatically since the advent of the Fourth Industrial Revolution and the growth of the global startup ecosystem. In recent years, unicorn companies have been recognized not only as a symbol of startup success, but also as a driver of economic growth that ensures innovation and growth, and an indicator of the maturity of the startup ecosystem. As a result, governments have begun to pay attention to policies that foster or support unicorn companies, and there has been discussion on the need to develop customized policies to support the success and growth of unicorn companies.
In Korea, there has been a growing interest in the growth of unicorn companies, and as of 2023, there were 14 unicorn companies. While the number of new unicorns has been declining recently due to high interest rates and the economic downturn, Seoul was recently ranked 9th in the global startup ecosystem, and most of the country's unicorns are concentrated in Seoul.
Contrary to popular belief, unicorn companies are “large-scale companies” that have grown significantly in terms of investment, capital, employees, and business history than typical startups, and their growth to unicorn status has been driven by attracting multiple rounds of investment, and in many cases, large-scale overseas investment has played a major role.
Policies to foster unicorns are being deployed across the globe with a variety of strategies, with innovation, investment, and network expansion cited as key drivers of SME scale-up. According to an OECD study, financial and non-financial support, platforms, and regulatory improvements are needed to facilitate scale-up.
Despite differences between countries, unicorn and scale-up policies in major countries such as the United States, United Kingdom, France, Germany, and Japan have a common policy of providing large-scale investment after “selecting promising candidates,” and programs to arrange global networking. Increasingly, unicorn/scale-up policies are evolving to strategically support a “global/platform-oriented tech sector” with high growth potential, as evidenced by recent EU policies.
In analyzing the current situation and policy needs of the next generation of unicorns, we found that, despite being mostly baby unicorns, the surveyed companies are more matured/growing scale-ups than typical startups. Most of them have grown mainly in the domestic B2B market through technology-based investment, and a small percentage of them are planning to enter overseas markets in the future. In terms of policy demands, R&D/technology and investment were viewed as the main areas for growth and policy support, and there was also interest in overseas markets.
Building a pipeline that connects the local startup ecosystem to the global market is key to the city's unicorn acceleration strategy, and it is necessary to devise a strategy to support unicorn acceleration based on the current startup ecosystem and support policies. This includes securing and expanding channels with global networks, revitalizing local startup ecosystems, securing consistency in startup and scale-up policies, and establishing a role division and cooperation structure that utilizes the strengths and weaknesses of the public and private sectors.
To this end, it is necessary to secure a global network to access markets, including strengthening support for global market entry and expanding the interface between global and local VCs; harmonize urban economic growth policies with unicorn and scale-up policies; utilize the Seoul Investment Fund as a “certified pre-investment”; and prepare detailed strategies to strengthen the local startup ecosystem as a source of innovation, including continuing to support the revitalization of the startup ecosystem using public support systems.