Startup Funding Winter 2026

The Numbers Speak for Themselves

Korean startup VC investment in the first half of 2026 was about 2.1 trillion won. In the same period of 2021, it was 7.8 trillion won -- that's a roughly 73% drop. Deal count also fell from 814 to 341, less than half.

Series A rounds are still happening, but Series B and beyond is almost frozen solid. Series B deal count dropped about 41% year-over-year. (Looking at that number, you can feel how anxious the startups that just raised their Series A must be.)

How Did We Get Here?

During the zero-interest era of 2020-2021, money was everywhere. VCs invested aggressively and valuations inflated to absurd levels. Companies with less than 100 million won in revenue were getting funded at 10 billion won valuations.

When interest rates went up, that bubble burst. LPs started putting money into bonds instead of startup funds, and new VC fund-raising became difficult.

But from what I can see, it's not just an interest rate problem. The lackluster follow-on performance of startups that raised in 2021 is a big factor too. When portfolio returns aren't there, VCs naturally become more conservative about new investments.

The Temperature on the Ground

Three friends of mine at startups all switched jobs this year. Two went to large corporations, one to a foreign company. The common reason: "The company has maybe 8 months of runway left and there's no prospect of follow-on funding."

Job postings have also clearly dried up. As recently as 2024, you'd see postings like "Senior Backend Developer, no salary cap." Now it's "3-5 years experience, negotiable." (The disappearance of "no salary cap" is one of those gut-level indicators.)

There's also the view that a funding winter isn't entirely bad. Plenty of startups raised at irrational valuations in 2021 and eventually failed. What's happening now is a natural cleansing process where only companies with real revenue and profitability survive.

Impact on Startup Employees

Salary increases have stalled. In 2021, switching jobs meant a 30% raise as a baseline. Now, flat or under 10% is the norm.

Stock option values have become uncertain. With the IPO market contracted, timing an exit is harder than ever.

Benefits have been cut too. Meal subsidies, self-development budgets, team workshops -- one by one, they're disappearing or shrinking. I heard about a company that used to offer unlimited book budgets now capping it at 100,000 won per quarter.

When Does This End?

Honestly, I don't know. There are forecasts that things will improve once rate cuts begin, but people said the same thing in 2024.

What is certain is that the excesses of 2021 aren't coming back. VCs have learned, and LPs have learned. Going forward, revenue-based rational valuations will be the baseline.

If you're a developer at a startup, you should be paying attention to your company's financials. If runway is under 12 months, it might be time to start considering your options. Being the last one off a sinking ship isn't noble -- it's just a loss.