By Kuksung Nam, The Readable
Sep. 5, 2023 11:48PM GMT+9
The South Korean government is making strides to boost the country’s standing in the global cybersecurity landscape, announcing plans to nurture its first high-value cybersecurity startup.
“Starting next year through 2027, we’ll allocate 130 billion won ($97 million) to fund the initiative,” said Hong Jin-bae, the deputy minister of the Office of Network Policy at the Ministry of Science and ICT (MSIT), in a Tuesday press briefing. “The goal of this fund is to create South Korea’s first cybersecurity unicorn.”
According to the MSIT, the number of cybersecurity startups achieving “unicorn” status—meaning they are valued at $1 billion or more by investors—has surged from just 13 in 2019 to 58 in 2023, fueled by robust venture capital investment.
While the cybersecurity industry is experiencing rapid growth, ranking third in sectors boasting the greatest increase in global unicorns, South Korea has faced challenges in nurturing a highly-valued cybersecurity startup. According to the government’s statement, several obstacles have hampered progress, including an industry culture that leans heavily on traditional security sectors like monitoring services, as well as a focus on domestic and public markets that are valued at roughly 5 trillion won ($3 billion) annually.
The initiative, which is referred to as the “cybersecurity fund,” represents a collaborative investment from both public and private sectors. The fund’s primary aim is to support startups specializing in emerging areas like artificial intelligence and zero trust. Additionally, the fund will facilitate mergers and acquisitions among small and medium sized security firms, enabling them to amplify their capabilities.
“To be frank, our objective zeroes in on nurturing a single, standout unicorn,” stated Hong. “While Silicon Valley is churning out numerous cybersecurity unicorns, our focus is on cultivating just the right company to stand alongside them.”
Including the “cybersecurity fund,” South Korea’s government is charting a course to invest a total budget of 1.1 trillion won ($824 million) by 2027, with the goal of increasing the size of the country’s cybersecurity market to 30 trillion won ($22 billion). As reported by the MSIT on Monday, South Korea’s cybersecurity firms collectively raked in sales of 16 trillion won ($12 billion) the previous year.
Furthermore, Hong revealed that the government is poised to help domestic cybersecurity firms break into burgeoning markets like Saudi Arabia and Vietnam. At present, South Korea has identified five countries—the United States, Indonesia, Oman, Tanzania, and Costa Rica—as strategic launchpads for amplifying its global cybersecurity influence.
“We’re pivoting our Middle East operations base from Oman to Saudi Arabia,” said the Deputy Minister of the Office of Network Policy. “We engaged with our Saudi Arabian counterparts last year, and there’s been substantial interest in collaboration. A lot is unfolding in Saudi Arabia, particularly in the realm of digital cities.”
The cover image of this article was designed by Areum Hwang.
Kuksung Nam is a journalist for The Readable. She has extensively traversed the globe to cover the latest stories on the cyber threat landscape and has been producing in-depth stories on security and privacy by engaging with industry giants, foreign government officials and experts. Before joining The Readable, Kuksung reported on politics for one of South Korea’s top-five local newspapers, The Kyeongin Ilbo. Her journalistic skills and reportage earned her the coveted Journalists Association of Korea award in 2021 for her essay detailing exclusive stories about the misconduct of a former government official. She holds a Bachelor’s degree in French from Hankuk University of Foreign Studies, a testament to her linguistic capabilities.