In a year marked by cautious optimism, venture capital (VC) investments in Korea's biomedical sector have shown a resurgence. The Korea Biotechnology Industry Organization (KoreaBIO), a representative organization in the bioindustry field in Korea, released a report on Wednesday, citing data from the Korea Venture Capital Association (KVCA) at the end of July.

The report revealed that VC investments in Korea's biomedical sector rose by 14.8 percent in the first half of 2024 compared to the same period last year, signaling a potential turning point for an industry that had faced significant challenges in recent years.

This growth in VC funding is particularly significant given the broader context of the global biopharmaceutical landscape. The biotech sector, which had enjoyed a wave of investment during the early stages of the Covid-19 pandemic, saw a sharp decline in subsequent years as interest rates climbed and investors grew wary of high-risk assets. 

The domestic biomedical venture investment, which reached 1.677 trillion won ($1.23 billion) in 2021, decreased by 34 percent in 2022 compared to the previous year and further declined by 20 percent in 2023

“Previously, there was a willingness to invest in riskier portfolios, but as interest rates rose after the pandemic, investors looked for more stable investments in areas with a high likelihood of success," said a KoreaBIO official.

Biotech companies that have fallen behind, including early-stage start-ups and less fortunate firms, have faced refinancing under less favorable conditions, mergers, or closures. However, KoreaBIO reports that this year has brought signs of a "new dawn" for the industry.

VC funding for biopharmaceuticals reached $14.1 billion globally in the first half of 2024, with projections suggesting a total of $28 billion for the year. This is an improvement over the totals of 2022 and 2023, even if still below the peaks of 2020 and 2021.

This trend mirrors global developments in Korea. The 14.8 percent increase in VC investments in the biomedical sector during the first half of 2024 marks a reversal of the downward trend seen in the previous two years. 

New VC investment in the sector amounted to 420.8 billion won, up from 366.5 billion won in the first half of 2023. This uptick follows a particularly difficult period for the industry, where investment had plummeted by 34 percent in 2022 and by a further 20 percent in 2023 from its peak in 2021.

The broader picture of VC investments in Korea shows overall growth in investments across various sectors, with new VC investments totaling 2.6754 trillion won in the first half of 2024, an 18.8 percent increase from the same period last year. While ICT services garnered the most attention, accounting for 32.1 percent of the total investments, the biomedical sector was the second most popular, capturing 15.7 percent.

This renewed interest in the biomedical sector reflects shifting investor priorities. While oncology continues to attract the largest share of funding globally, areas like neurology, endocrinology—particularly diabetes and obesity—and autoimmune diseases are gaining traction. 

“Companies that can align their research and development with current trends are the ones most likely to attract funding," said the KoreaBIO official. "It's about biotech companies tailoring their projects to meet investor demands."