Crowdfunding is gaining popularity in South Korea as an effective option for both startups and investors, government data showed on Dec. 12.
More than 100 firms, mostly those in the manufacturing, ICT and filmmaking sectors, have funded a total of 16.3 billion won (US$14 million) from 5,516 investors through the system, according to the Financial Services Commission.
South Korea introduced the equity-style crowdfunding program in January, which allows early-stage startups to raise capital from a large number of individuals investing relatively small amounts of money, usually through online channels.
The new local nuclear disaster movie “Pandora” has raised 700 million won through the new type of financing, setting a record high in the amount of funds secured through the platform for a single project.
“The funding success rate has gone up to 43 percent as of Dec. 9, meaning around half of the business ideas (proposed) have been commercialized,” said the nation’s financial regulatory body.
The number of companies seeking to bag capital through the new corporate fundraising method is on the rise and the success rate is also expected to rise, it added.