Bio-healthcare industry is growing fast in investment market thanks to policy supports and social attention, analysts say.
Korea Institute of Science and Technology Evaluation and Planning(KISTEP) 한국과학기술기획평가원 made these and other points in its report titled “Venture capital investment in 2016,” based on the data of Korean Venture Capital Association(KVCA) 한국벤처캐피탈협회 and Korea Exchange 한국거래소.
"New investment of 468.6 billion won ($418 million), or 21.8 percent of the total, went to bio-healthcare industry last year, followed by 406.2 billion won (18.8 percent) to ICT service sector, and 267.8 billion won (12.5 percent) to the image-performance-record sector,” the report said. “Bio-healthcare industry and ICT service sector have emerged as primary targets of investors.”
Bio-healthcare industry also produced the largest number of businesses that succeeded in attracting venture capital investment, with 11 while recording the shortest time for initial public offering, with 11.5 years, compared with the average of 13.1 years.
Especially, bio-healthcare sector got a high evaluation in “post-money valuation (unit investment price per share multiplied by the number of total shares issued at the time of investment),” which is a company’s value at the moment of investment.
According to the value evaluation of bio-healthcare companies as of 2016, their average value was 58.4 billion won, and their median values were 26.5 billion won, second highest following the chemistry/material industry, which showed the average value of 136.6 billion won and median values of 27.4 billion won.
Their earnings ratio was also second highest following the game industry. According to the association, the earnings ratio of venture capitals in the bio-healthcare sector was 186.6 percent last year, second only to the game industry’s 249.4 percent.
"Investment trend has been shifting from ICT and manufacturing to bio and healthcare, and O2O (online to offline) industries with the portion of the investment in start-ups increasing,” it said. “Last year, new investment hit the record high, and the growth is expected to continue in the future. To create a virtuous circle in the investment market, the parties involved should improve the environment for retrieval by expanding M&A and reinvigorating KOSDAQ market.”