Venture capitalists are making special funds for K-beauty startups as the popularity of South Korean cosmetics stays high. This rise in interest can also be viewed in stock market trends. In fact, small and medium sized Indianised K-beauty brands are getting more traction in India versus Korea. VCs find such brands more appealing as they have the power to expand globally.
In July 2022, Mark & Company, a Korean venture capital company started a special fund for K-beauty startups and to train employees. It aims to raise 10 billion won. Mark & Company have already got over 8 billion won from private investors. In 2023, Shinsegae Group’s corporate VC, Signite Partners, started a 56 billion won fund for K-fashion and K-beauty. This is the first in Korea and is co-managed by KDB Capital. Most of the larger VC firms have blind funds where they take a call on the investment after raising capital and all of them are focusing on K-beauty. For instance, in September 2023, Atinum Investment launched Korea’s largest venture fund with 860 billion won and invested in Craver Corporation, a K-beauty startup.
K-beauty saw its first high in mid-2010s with the main focus on China. There have been exports to Europe, but US and Japanese markets were overlooked. Mostly large companies, like LG H&H and Amore Pacific Corporation were the main players, which reduced the opportunities for VCs. Now in the second wave of the boom, small and medium-sized brands are the main propellers. They are expanding the markets beyond China. One of the main reasons for the heightened attraction is due to the popularity of K-pop.
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The K-beauty sector is driven by small and medium-sized brands diversifying their exports beyond China. These brands have gained traction due to the popularity of K-pop. For instance, Atinum Investment’s Craver Corporation generates 90% of its sales from the U.S., Europe, and Southeast Asia.
