The fashionable Seoul neighborhood made famous by the Gangnam Style K-pop hit is known for status-conscious residents, plastic surgery clinics and Ivy League prep schools. Now it is has also become a bustling center for technology startups.
Many young South Koreans, some educated overseas, are going to Gangnam to start mobile or Internet businesses. Venture capitalists from Silicon Valley and Japan are opening offices in the area to find promising South Korean services or apps to invest in.
As one of the most tech-savvy places in the world, Seoul has been a crucible for several startup scenes. The government is even aiming to make a town south of Seoul a South Korean Silicon Valley.
However, it is in the 40km2 of land south of the Han river where the growth of Internet and mobile startups has been most evident and the related culture most vivid.
Despite its reputation as a beacon for the shallow and status-obsessed, Gangnam has a special significance in South Korea as the place where a globalized youth culture emerged from a generation that had opportunities to travel and study abroad. The present day Gangnam is still seen as the place that brings foreign culture and ideas to the rest of the country.
“Gangnam has the best of the New York City and Silicon Valley,” said Steven Baek, a marketing director at FuturePlay Inc, an incubator for startups.
“[Silicon Valley] is tech-centric, with a lot of nerdy and geeky people, but it doesn’t have much diversity,” he said. “Gangnam’s benefit is diversity. New York has lots of fun clubs and rich consumer-based culture like Gangnam but it doesn’t have many engineers.”
Another common reason for startups going to Gangnam is that everyone else is there, which makes networking effortless.
Near Gangnam’s Teheran-ro Boulevard, many Gangnam startups, venture capitalists and startup incubators have opened offices in the past year, with more due to arrive in coming months. All three major media companies dedicated to covering startup stories are there too.
Recent openings of two spaces for startups accelerated the startup boom and revived the Internet scene on Teheran-ro.
D.CAMP opened last year and Maru180 earlier this year a few blocks from Teheran-ro to rent cheap spaces to startup companies and investors. These Silicon Valley-style communal work spaces regularly host meet-ups. Maru even has showers and bunk beds. The spaces are designed to enable serendipitous, accidental meetings in communal areas.
Next year, Google Inc is opening its first campus in Asia in Gangnam, giving mentorship and offering spaces for entrepreneurs to meet. South Korean Internet giant Naver Corp is also opening a startup accelerator center in Gangnam early next year.
A 32-year-old entrepreneur, Simon Lee, said his company’s namesake translation app Flitto, which uses volunteers to do translations within minutes, is taking on Google Translate. His two-year-old startup is planning to expand into China next year.
Gangnam’s startup boom reflects a shifting perception on risk taking in South Korea, where the economy is dominated by big family-owned business groups.
Even just a few years ago, the word startup was unknown outside tech circles. That has changed as a growing number of South Korean startup entrepreneurs generate success stories by going public, selling their companies or winning big investments.
The South Korean government is putting more taxpayer money behind young and risky entrepreneurs, not limited to Gangnam startups. The government plans to use a US$181 million budget next year to make angel investments in early-stage startups.
Still missing in South Korea’s startup boom are big companies like Google, Facebook Inc and Yahoo Inc that snap up local startups.
Samsung Electronics Co, LG Electronics Co, SK Group and other South Korean conglomerates tend to overlook local startups and believe paying big money to buy a startup is an admission of failure, Lee said.
“Big companies do almost no M and As [mergers and acquisitions]. They don’t want to admit they are inferior to startups,” he said.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by