South Korean VC market recovers as deep tech drives IPO trends

A report by KPMG indicates a recovery in the venture capital (VC) market, driven by growth in deep tech sectors such as AI, semiconductors, and biotechnology. New venture investment in South Korea reached 13.6 trillion won in 2025, a 14% increase from the previous year, with the first half of 2026 seeing a further 56.2% year-on-year increase to 8.8 trillion won.

Investment is increasingly concentrating on companies with proven growth and profitability. Average investment per company has risen steadily, reaching 3.86 billion won in the first half of 2026. Notable large-scale investments include 640 billion won for AI semiconductor firm Rebellions and 400 billion won for FuriosaAI during their pre-IPO stages.

The role of Initial Public Offerings (IPOs) as an exit strategy for VCs is expanding, rising from 24.3% in 2022 to 37.9% in early 2026. While more technology companies are listing on the KOSDAQ through special exemptions, scrutiny from regulators has intensified. Approximately 83% of companies that failed to receive listing approval or withdrew their applications between 2025 and early 2026 cited issues related to revenue stability and profitability.