Some start-ups get big and grow at faster rates
Companies such as Nexon and NHN now have yearly sales of over 1 trillion won.
The Small and Medium Business Administration (SMBA) and the Korea Venture Business Association (KOVA) released the Venture 100 Billion Club yesterday, an annual survey of start-ups with sales of more than 100 billion won.
Despite the ups and downs of the economy since the 2008 global financial meltdown, start-ups showed notable gains in the past eight years. Six companies currently report 1 trillion won in sales annually and 54 companies reached the 100 billion won sales mark last year.
Meanwhile, 19 companies saw their sales dip below 100 billion won.
Among the 54 companies, 14 of them were in the computer, semiconductor and electronic components industry and 11 were in food and beverage, textiles and non-metals industries.
The growth rate of the number of start-ups with 100 billion won in sales slowed to 9.2 percent last year from 14 to 49 percent increases over the previous seven years.
Yet the number of start-ups with 100 billion won of sales last year was six times the number in 2005 when the SMBA and the KOVA first conducted the survey.
By industry, growth of start-ups was highest in general manufacturing such as machinery, manufacturing and automotives and in high-tech manufacturing such as computers, semiconductors and electronic components.
The number of start-ups with over 100 billion won in sales increased 52 percent in general manufacturing and 32 percent in the high-tech manufacturing industry last year.
The number of start-ups with over 100 billion won in sales increased 60 percent in telecommunications and broadcasting services, 52 percent in general manufacturing and 50 percent in the energy and medical industries.
The number in software development grew by 40 percent and in the high-tech manufacturing industry by 32 percent last year.
For these 416 start-ups, according to the survey, it took an average of 17 years to top revenues of over 100 billion won as of last year, a year longer than 16.1 years in 2011.
“The spread of the global financial crisis, followed by the European fiscal crisis and the domestic consumption downturn, have resulted in slower growth of start-ups,” said an SMBA official.
Getting to the 100 billion mark took the least number of years for communication and broadcasting equipment industries, 10 years - the most - in food and beverages, and 22.4 years in the textiles and non-metals industry.
In addition, the survey found that 39 of the 416 start-ups with more than 100 billion won of sales, dubbed high growth start-ups, reported sales increases of more than 20 percent for three consecutive years.
They were mostly in machinery, manufacturing and autos (15 companies) and computers, semiconductors and electronic components (11).
Among the six companies with sales over 1 trillion won, NHN has maintained 1 trillion won in sales since 2008 when they first reached 1 trillion won.
Nexon Korea, Korea Nitto Optical, Sungwoo Hitech and Yura Corporation made it to the list of companies with 1 trillion won in sales last year, while Sam Dong Korea fell off the list.
As the total revenue of the 1 trillion won start-ups reached 89.2 trillion won last year, they accounted for 7 percent of the country’s gross domestic product last year, up from 6.3 percent in 2011.
Each company hired an average of 351 employees last year, 8.6 percent more than in 2011, and their payroll growth was double that at both small and medium-sized manufacturing companies and large corporations.
BY KIM JUNG-YOON [email@example.com]
More in Industry
Battery business eclipses oil as demand shifts for good
Kakao proves Japan has an appetite for Korean webtoons
Korea seeks to import remdesivir to treat coronavirus
Samsung’s de facto leader appears for more questioning
Hyundai's take on flying car may star alongside Spider-Man