There has been a rise of promising Fintech startups in Korea. So far there are over 400 Fintech companies in South Korea. Furthermore, the Korean government also realizes the potential of Fintech in enabling financial inclusion. Therefore, the financial services industry has quickly become a major industry in Korea and especially in Seoul. Korean investors are very interested in Fintech that deal with payments, money transfers, insurance, markets, and capital allocation. The world for Fintech has changed from intermediaries to software, APIs, and mobile networks. In addition, this shift will open up opportunities for lower costs, higher transparency, and more accessibility. 

What is Seoul Fintech Lab Incubation Program? 

Seoul Fintech LabThe Seoul Fintech Lab was established to support Fintech startups in Korea. There are two Seoul Fintech Labs in Seoul that are funded by the Seoul Metropolitan Government since 2018. The first was launched in Mapo called Mapo Fintech Lab and the 2nd was launched in Yeouido as the 2nd of Seoul Fintech Lab. The Seoul Fintech Lab is being operated by 2 private companies with a consortium, K accelerator, and teamw.e. Their aim is to accelerate and provide support for promising fintech startups with new technology so they can raise the global competitiveness and enhance the competitiveness of Korea’s financial industry. 

K-Accelerator – Operator of Seoul Fintech Lab

Seoul Fintech LabK-Accelerator was registered as an official member of the Ministry of SMEs and is creating new value to support corporate development and investment in a more professional and differentiated way to meet the rapidly changing fintech industry environment. They provide the participating startups with the best support to achieve their goals. These include:

  • Business evaluation
  • Goal setting
  • Expert Mentoring
  • Introduction to networking programs

In addition to being the operator of Seoul Fintech Lab, K-Accelerator is the operator of the fintech support center called “Fintech Cube”. K-Accelerator also has a fintech innovation fund to make direct investments in promising fintech startups.

Largest Fintech Community in Korea

Seoul Fintech Lab is Korea’s largest community that specializes in Fintech. In addition, the Seoul Fintech Lab has over 70 startups of which 70% are based in Korea and the remaining 30% are based overseas. Their goal is to accommodate 100 fintech startups and 1,000 employees and make Seoul Fintech Lab a world-class no.1 fintech lab. 

“The Seoul Fintech Lab will become the center of Fintech in Asia by providing customized support for each member company utilizing Yeouido’s advantageous location. Furthermore, we will attract competitive overseas companies to Seoul and operate the Seoul Fintech Lab as a key anchor for the industry, helping our promising local startups advance abroad, ” said the deputy mayor for economic development at Seoul Metropolitan Government, Cho In-dong.

In October, the Seoul Fintech Lab located at WeWork Yeouido expanded 2 more floors. Therefore they were able to recruit 30 more fintech startups by September 11th. Of the 30 startups, 5 were global startups.

Support services for Seoul Fintech Lab Incubation Program include: 

  • Customized mentoring for commercialization 
  • Investment
  • Marketing 
  • Law and Patent assistance 
  • Technology development
  • Overseas advancement
  • Public relations
  • Free office space for a year (up to 2 years) – Seoul Fintech Lab offers independent office space for 6 and up to 20 people. Meeting rooms, education centers for business consulting, staff meetings, as well as public lounges for tenant networking, are also available. 
  • Mentorship with local experts – Fin-Mentor – Seoul Fintech Lab provides business mentoring programs such as diagnosing, commercialization, business model, and enhancing investment capabilities. 
  • Accelerating Programs
  • Startup Education & Training – Fin-Academy – The incubation program runs exclusive education programs twice a month. Some of these topics include: how to enhance the capacity of attracting global investment, IR pitching/preparation, understanding fintech regulations and systems, and business model/business plan preparations.
  • Demo-day & IR – Fin-Demo – A demo day is held to provide fundraising opportunities to the tenant companies, once a month. In addition, they hold regular networking sessions with financial companies, fintech investment VCs, and foreign investors.
  • Global Expansion Support

Seoul Fintech Lab hosted Seoul Finance Week in late 2019. It was a week that celebrated the Fintech startup ecosystem in Korea. Therefore Seoul Finance Week included a pitch competition that showcased promising fintech companies and investor relations which brought in over 20 domestic and international investors. In addition, the grand opening of the 2nd Seoul Fintech Lab brought in some of the most influential government figures in Korea. 

Who can join the Seoul Fintech Lab Incubation Program? 

Seoul Fintech LabIncorporated startups involved with Fintech or IT tech can apply. Furthermore, Seoul Fintech Lab takes both Korean startups and international startups. Therefore, they are looking for Fintech startups that plan to expand into the Southeast Asian market. The startups must be in their growth stage and must have been established within the past 7 years. Furthermore, 100 million KRW in funding is required, and gross revenue of over 100 million KRW. In addition, the startup must employ over 4 employees. 

Examples of Fintech Companies Seoul Fintech Lab is looking for

  • Digital/mobile banking
  • Payments
  • Remittance
  • Robo-advisory
  • Blockchain-based financial services
  • Financial security
  • Insure-tech
  • Reg-tech
  • Big data analysis for finance
  • Finance management 

The applications are assessed both in paper screening and in-person by focusing on the startup’s technology and growth potential. The application period is not fixed and will be announced through the official website of the Seoul Metropolitan Government and Seoul Fintech Lab’s official website.

How to join the Seoul Fintech Lab Innovation Program? 

Fintech Lab in SeoulThose that are looking to apply should visit Seoul’s website or K-startup’s website to check for announcements. Furthermore, application forms can be printed through the site and handed in on the 6th floor of WeWork Yeouido. They have opened applications for their 2021 Fintech startup incubation program. The applications are open until early June and the selection process will be completed by June 18th. 

They are looking for Fintech startups that plan to expand into the Asian markets or in South Korea in these Fintech relevant businesses: 

  • Digital/mobile banking
  • Payments
  • Remittance
  • Crowdfunding
  • Financial data analysis and management
  • Reg-tech
  • Insure-tech
  • Financial Security
  • Blockchain-based Financial Services
  • Robo-advisory
  • Prop-tech

The Fintech startups will need to have a registered business overseas started before August 20th, 2020. Business registration in South Korea is not necessary. However, the Seoul Metropolitan Government will not support Visa for application into the Seoul Fintech Lab Incubation Program. In addition, Fintech startups in Korea that are already getting support for office space from the Seoul Metropolitan government of any government organization in Korea will be excluded from the list of applicants. However, if they choose to give up their project or the project term ends before the announcement date can apply.

Timeline Process in 2021

  • Application Period: Until June 5th
  • Application Link: Seoul Fintech Lab Website ( www.seoulfintechlab.kr )
  • 1st Round Paper Review: June 5th, 2021, ~ June 18, 2021
  • 1st Round Results Announcement: June 18, 2021, by individual E-mail
  • 2nd Round In-Person Presentations: June 21, 2021, ~ June 22, 2021
  • Final Results Announcement: June 24, 2021, by individual E-mail
  • Signing the Agreement for Seoul Fintech Lab Startup: July 5, 2021, ~
  • Orientation for Final Selected Startups: July 12, 2021, 3 PM – 5 PM at 8th Floor
    of Seoul Fintech Lab
  • Move-In Period: ~ July 30, 2021

Required documents include a copy of the business registration document, resumes of management team members, financial statements for the last 3 years, and a business plan. Therefore it is important to plan ahead and get these documents ready before applying. It is expected the same process will be applied for 2022. 

The business plan should include:

  • Company history (Information & status)
  • Organization structure
  • The reason why you want to join the Seoul Fintech Lab Incubation Program 
  • Market analysis and competitive positioning including South Korea and globally
  • Business model/Competitive advantage 
  • Growth roadmap which includes hiring plans in South Korea and overseas
  • Fundraising status (Include fundraising and sales)
  • Detailed move-in date to the Fintech Lab
  • Number of employees who will work in the office of Seoul Fintech Lab

The residency period will be from July 2021 to June 2022 (12 months). The residency period can be extended through mid-term/extension evaluation results up to 1 year longer (for a total of 2 years).

Why is there so much interest in Fintech in Korea?

Fintech in Korea

Korean fintech firms and startups have attracted over $110 million in investment over the past year. A lot had to do with many of these companies and startups incorporating new technologies like AI, Blockchain, and Big data to develop new financial services. Therefore, these new innovations will be crucial in helping Korean fintech companies expand into new markets outside of Korea.

In addition, mobile technology has played a big role in Fintech in Korea. Korean startups used API to create innovative mobile payment solutions and financial services. Therefore, one might think Korean banks would be leading the way, however that has not really been the case in Korea. A typical Korean bank uses over 90% of its tech budget for regulatory compliance and maintaining old legacy systems. Therefore, this leaves very little room for innovation which means there is a lot of opportunity for upstart Fintech startups in Korea. This is why Toss, a money transfer app, has been able to succeed in Korea and become a unicorn Fintech startup in Korea. Therefore, The Seoul Fintech Lab Incubation Program will help nurture Korean Fintech startups so they can become the next Toss. 

The Success of Korean Fintech Startup Toss 

Fintech Startup TossToss was able to find the issue in South Korea’s banking industry. Korean bank money transfer systems required people to remember bank account numbers. Therefore, Toss worked with regulators in Korea to create an easy-to-use money transfer platform that just needed one’s phone number. Soon, Toss quickly became the top money app in Korea. In addition, the Fintech startup got a lot of attention from Korean VCs such as Altos Ventures who saw the potential of Toss. Therefore, as more investors invested, Toss was able to grow their tech team and soon got the interest of PayPal who also became investors.

Today, Toss has around 15 million registered users and has processed close to $50 billion in payments to date. Furthermore, their plan for 2021 and beyond will be to expand into Southeast Asia where more than half the adult population is unbanked. 

The Potential of Fintech Startups in Korea 

finance centerThe payment market in Korea is already very advanced (90% of transactions done electronically). Therefore, the financial services market is very competitive. Fintech startups in Korea are constantly competing with each other to offer better financial service experiences. Furthermore, Korean Fintech startups are integrating new technologies like computer science, data science, machine learning, and AI into one place. However, in Korea, Blockchain seems to be the new “hot” technology that many Fintech startups are looking into. Furthermore, many have only been around for a couple of years. Therefore, this shows how fast entrepreneurs in Korea move when starting a Fintech startup. 

Pilot Blockchain projects in Korea are getting implemented in financial market infrastructures. In addition, Korean banks are looking into incorporating Blockchain technologies into their financial services. Therefore, Korean Blockchain startups will be able to move quickly with their research and development in ways that bigger corporations can’t. The same goes for Fintech startups in Korea. Therefore, they have the potential to lead the way in digital thinking and innovation. All the pieces are there for Korea to position itself as a global leader in Fintech.