Unicorn Farm, a parliamentary start-up support center, opens

Industry

Published: 15 Nov. 2022, 19:06 Updated: 15 Nov. 2022, 19:07

Unicorn Farm, a parliamentary start-up support center, opens

Rep. Kang Hoon-sik of the Democratic Party (DP), right, and Rep. Kim Sung-won of the People Power Party, speak at the kick-off ceremony for Unicorn Farm on Monday. [REP. KANG HOON-SIK'S OFFICE]

A parliamentary start-up support center opened Monday as rates rise and regulations on new companies tighten dramatically.

The ceremony, which took place at Front1 start-up incubating center in Mapo District, western Seoul, was attended by lawmakers and executives of a total of around 20 start-ups including, Woowa Brothers CEO Kim Beom-jun and Zigbang CEO Ahn Sung-woo.

Named the Unicorn Farm, the support center will aim to foster more start-ups and protect unicorns from encountering conflicts with traditional players and associations as the support for the platform start-ups, in particular, has been weakening due to various controversies and are in difficulties with shrinking investment as the global economy weakens, according to co-representatives of Unicorn Farm, Rep. Kang Hoon-sik of the Democratic Party (DP) and Rep. Kim Sung-Won of the People Power Party (PPP).

The two lawmakers stressed that members of the support center will listen to the requests of start-ups and propose bills accordingly, referencing the struggles mobility company Tada faced in 2019. Tada, after taking blows from the National Assembly and taxi drivers, had to substantially shrink its services a year after opening up in 2018.

The situation has not changed much, according to start-up founders. In fact, the market is becoming tougher as investments have plunged due to the weak global economy and as authorities look into restrictions on online platforms after Kakao services went down last month.

One difference compared to a few years ago is that while start-ups were challenged by the traditional industry and the National Assembly, new businesses these days are boycotted by associations that exert their power directly to their members

One such example is the ongoing legal battle between the Korean Bar Association (KBA) and Law&Company, operator of the LawTalk brokerage app.

KBA is a special association of lawyers that has legal rights to change some clauses of the Attorney-at-law Act, which means the penalty from the association is legally binding.

The KBA kept appealing that the use of the LawTalk app violates the Attorney-at-law Act and warned lawyers not to use them. The bar association decided last month to fine nine lawyers up to 3 million won ($2,100) for violating the Attorney-at-law Act by using the LawTalk app to promote themselves.

The application company argues its service is completely legal.

“The KBA constantly frames us as an illegal service by repeatedly suing us,” said a spokesperson for LawTalk.

A revision to the Licensed Real Estate Agents Act, proposed by a DP lawmaker last month, added fuel to the controversy.

The bill forces property agents to register with a real estate association and be given some legal rights as members. This could allow the association to restrict online platforms such as Zigbang.

Lawmakers in attendance promised to heed the start-up voices more by studying deeper the power dynamics and other conditions, vowing to become a "legislative body for start-ups."

“It is not ideal for the country and the people for the country to be one-sided when there is a conflict between the traditional law and the new reality,” PPP Rep. Kim Byung-wook said.

DP members are pushing to establish restrictions on online platforms after Kakao’s service went down due to a fire in its data center last month.

The amendment to the Licensed Real Estate Agent Act has been co-proposed by a team of 24 lawmakers from different parties including the DP, PPP and the Justice Party.

Two DP representatives who are also members of Unicorn Farm — Reps. Lee Yong-bin and Park Sang-hyuk — are on the list.

When asked about serving as a member of the support center and supporting such a bill, Rep. Lee said that he was named on the list of those proposing the revision by his office and "acknowledged that there was such bill afterward."

BY SIM SEO-HYUN [cho.jungwoo1@joongang.co.kr]