Seoul Fintech Lab – Incubation Program for Fintech Startups in Korea

There has been a rise of promising Fintech startups in Korea. There are over 400 Fintech companies in Korea. Furthermore, the Korean government also realizes the potential of Fintech. Therefore, the financial services industry is a major industry in Korea and especially in Seoul. This is an industry that has embraced digital technology and networks for decades. 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.  Therefore, the Seoul Metropolitan Government has partnered with WeWork to create the Seoul Fintech Lab to nurture Fintech startups in Korea. 

What is Seoul Fintech Lab Incubation Program? 

Seoul Fintech LabSeoul Fintech Lab is a fintech center that supports fintech startups in Seoul. There are two Seoul Fintech Labs in Seoul. The first was launched in Mapo and it focuses on early-stage Fintech startups. The second is located at WeWork Yeouido and has 14 fintech startups from Hong Kong, Singapore, and the United States. Seoul Fintech Lab is Korea’s largest space that specializes in Fintech. In addition, the Seoul Fintech Lab can house over 70 Fintech startups. Furthermore, it is equipped with meeting rooms, a shared lounge, and seminar rooms. 

“The 2nd Fintech Lab will become the center of Fintech in Asia by providing customized support for each member company utilizing Yeouido’s advantageous location and the strengths of WeWork’s global platform. Furthermore, we will attract competitive overseas companies to Seoul and operate the 2nd 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.

All the fintech startups at Seoul Fintech Lab will be provided with global startup support services by K-Accelerator (Operator of Seoul Fintech Lab Incubation Program). Their aim will be to help accelerate Fintech startups through their global network. 

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)
  • Mentoring 
  • Access to WeWork’s global network 

Seoul Fintech Lab hosted Seoul Finance Week in late 2019. It was a week that celebrated the Fintech startup ecosystem in Korea. For example, there was 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. Furthermore, the Mayor of Seoul, Park Won-soon, and the commissioner of the Korean Intellectual Property Office, Park Won-joo were in attendance. 

Who can join the Seoul Fintech Lab Incubation Program? 

Seoul Fintech LabIncorporated startups involved with Fintech or IT tech can apply. Seoul Fintech Lab takes both Korean startups and international startups. 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 

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. Required documents include a copy of the business registration document, resumes of management team members, and a business plan. 

The business plan should include:

  • Company history
  • Organization structure
  • The reason why you want to join the Seoul Fintech Lab Incubation Program 
  • Market analysis
  • Competitive positioning 
  • Business model
  • Competitive advantage 
  • Growth roadmap 
  • Financial statements
  • Fundraising status
  • Expansion and hiring plan

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. 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 their 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 2020 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. For example, financial transactions that are processed electronically is at 90% in Korea. 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, Korea 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. For instance, it is estimated that there are over 100 Blockchain startups in Korea and 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.