Seoul Fintech Lab has been one of the top incubation programs in Korea. The program was created in response to the 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, especially in Seoul. This makes Seoul a great testbed for fintech startups. Korean investors are interested in Fintech regarding 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.
The Seoul Fintech Lab was established to support Fintech startups in Korea. There are two Seoul Fintech Labs in Seoul that have been 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 two 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 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 participating startups with the best support to achieve their goals. These include:
K-Accelerator also has a fintech innovation fund to make direct investments in promising fintech startups.
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. They aim 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 to two more floors. Therefore they were able to recruit 30 more fintech startups by September 11th. Of the 30 startups, 5 were global startups.
Incorporated 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 seven years. Furthermore, 100 million KRW in funding is required, and gross revenue of over 100 million KRW. In addition, the startup must employ over four employees.
Those that are looking to apply should visit Seoul Fintech Lab or K-startup’s website to check for announcements. They are looking for Fintech startups that plan to expand into the Asian markets or in South Korea in these Fintech relevant businesses:
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 or 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.
Start-up companies within seven years of founding.
Two or more of the following conditions must be met.
Within three years of founding, employees 5 Initial start-up companies with less than one employee (based on the list of subscribers at the four major insurance business sites).
As of the announcement date, preliminary start-ups are not eligible to apply.
Required documents include a copy of the business registration document, resumes of management team members, financial statements for the last three years, and a business plan. Therefore, it is important to prepare these documents before applying.
The residency period will be for 12 months.
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 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 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.
Toss was able to find the issue in South Korea’s banking industry. Korean bank money transfer systems require 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 its tech team and soon got the interest of PayPal, which also became an investor.
The payment market in Korea is already very advanced (90% of transactions are 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.
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