Yeoksam-ro in Gangnam-gu, Seoul, was abuzz on Jun. 10 with young startup CEOs and venture capitalists (VCs). The activity came in expectation of the annual ‘Start Track Week,’ organized by the Gangnam-gu office, to bolster startup growth. The festival, running from Jun. 17 to 19, has been a staple since its inception in 2021, with streets adorned with banners proclaiming, “Start Track, the runway for dreams to soar.”
At the Gangnam Job & Startup Hub Center’s coworking lounge, resident startup CEOs engaged in animated discussions. “How did the investment round go?” one asked. “We decided to change our business direction a bit,” another replied. Conversations centered on investment, customer acquisition, and marketing strategies. The casual attire of these young entrepreneurs stood out, with men in jeans and black T-shirts and women in shorts and hats.
The center also hosted international visitors, including Thai startup CEOs, university professors, and government officials, who came to learn from the center’s startup incubation program. “Startups from Asia and Europe, including Thailand and Mongolia, are visiting to understand Korea’s startup incubation policies,” said Choi Jong-won, head of Gangnam Job & Startup Hub Center.
Gangnam’s Start Track, a 560-meter street dedicated to startup support, runs from the former National Tax Service Yeoksam District Office to the Yeoksam Elementary School intersection. It houses several startup support centers, including Gangnam Job & Startup Hub Center (Gangnam-gu office), TIPS Town (Ministry of SMEs and Startups), MARU (The Asan Nanum Foundation), and CHANGeUP GROUND (POSCO), and is home to around 170 startups.
Designated as a Venture Business Promotion District in January 2022, Start Track offers significant tax benefits to startups, including a 50% reduction in acquisition tax and a 35% reduction in property tax.
Gangnam-gu’s strategic location, with about half of South Korea’s VCs are situated in Teheran-ro and Yeoksam-ro, makes it a prime area for startup growth. The startup support centers utilize their networks to help resident startups secure investments.
The results are promising. As of 2023, 94% of startups at the Asan Nanum Foundation’s MARU have secured investment, with an average funding amount of 1.2 billion won.
“Investing in a startup requires multiple meetings with the CEO to assess business growth,” said Jeong Hoe-hun, CEO of KAIST Venture Investment Holdings. “Start Track is efficient as it brings together startups and VCs.”
Another key factor in Gangnam-gu’s rise as a startup hub is its low rent support. Startup support centers in Start Track offer rents 30% to 40% below market rates, with monthly costs ranging from 120,000 to 150,000 won. These centers provide legal, HR, marketing, and sales consulting services.
“The low rent was crucial before we received investment,” said Shin Jae-cheong, CEO of Samsin, a medical technology startup developing ovarian-age self-testing kits that moved into the Gangnam Job & Startup Hub Center in August last year and has since raised seed investment. “After receiving investment, we got marketing support, including help creating a product explainer video.”