K-fintech unicorns: only Toss and Dunamu

Licensing and other barriers block growth

In South Korea's fintech industry, observers say it is difficult to find 'unicorns' with a corporate value of over 1 trillion won besides Toss and Dunamu. In particular, analysts say that Korea's uniquely strict financial regulations and licensing-centered entry barriers are blocking the growth of innovative fintechs.

On the 21st, according to the Korea Fintech Support Center, among domestic fintech companies, those that have not raised any investment account for 54.6%(as of 2023), more than half. The average amount of investment raised in the fintech sector fell from KRW 3,721,000,000 in 2021 to KRW 1,393,000,000 in 2023, down to one-third.

Domestic fintech companies often face financial regulations that are stricter than those in advanced countries when commercializing innovative ideas. In particular, when offering services similar to traditional financial institutions, high entry barriers and complex licensing procedures are cited as major factors blocking the growth of latecomers.

An industry official lamented, "To expand businesses beyond simple remittance·payment services into asset management, loan brokerage, insurance, etc., approval from financial authorities is required, but the procedures are complex and uncertainty is high," adding, "The delay in regulatory relaxation makes it difficult for innovative companies to grow."

Overseas, fintech is considered a promising industry along with artificial intelligence (AI) and the aerospace sector. Among the companies that became global top-10 unicorns along with OpenAI, one fintech is Stripe.

Mi-hyun Jo reporter mwise@hankyung.com