They Prepared for IPO with Strong Performance... Fake Accounting Led to Investments, Shocking the VC Industry [VC Now]

'Q Market' Food Materials Platform Attracted Hundreds of Billions

Massive Policy Fund Injection from Mother Funds and Korea Development Bank

"GP Authority Must Be Strengthened During Due Diligence"

The hottest topic currently in the venture capital (VC) industry is the accounting fraud controversy surrounding AsWeMake, the operator of the food materials market platform QMarket. It has been confirmed that a significant amount of investment was injected into sub-funds backed by policy funds from limited partners (LPs) such as Korea Venture Investment Corp. and the Korea Development Bank. There are also calls for change, emphasizing that relying solely on the integrity of investee companies is no longer sufficient.

'Promising IPO Candidate' at the Center of Controversy

AsWeMake, which had been preparing for an initial public offering (IPO) at the end of last year, aroused suspicion among investors this year while seeking additional investment. During the financial due diligence (FDD) process conducted by potential investors, discrepancies were reportedly identified between the previously reported figures and the actual financial information. The company is also suspected of having misused the name of the accounting firm that prepared the relevant audit report.

AsWeMake had consistently attracted investment by demonstrating steady performance growth. The company reported sales of 3,586,278,000 won in 2023, 12,075,469,000 won in 2024, and 32,170,509,000 won in 2025. Operating profit also increased over the same period from 35,719,000 won to 1,079,399,000 won and then to 8,004,582,000 won. The figures looked promising, but it appears that all of them were fabricated. According to the startup market analytics firm TheVC, AsWeMake raised more than 26.3 billion won in investments. If this controversy had not arisen, the company was reportedly planning to raise an additional 50 billion won.

Founded in 2019, AsWeMake is a retail-tech startup that garnered attention in the venture investment sector by operating the QMarket food materials market order and delivery application. After the controversy broke, founder and former CEO Son Suyoung resigned. The company has since discontinued the cash-burning QMarket service and reorganized its business structure to focus on B2B Software-as-a-Service (SaaS).

According to industry sources, the company was actively seeking an IPO, having selected NH Investment & Securities as its IPO underwriter last year. This led to significant interest from VCs during the recent fundraising round. After the allegations surfaced, some VCs halted their capital contributions, but there are others who had already completed their investments earlier. Investors expect it will be difficult to recover the invested funds. They have hired an accounting firm to audit the company, and related investigations are underway by law enforcement authorities.

Large Amount of Policy Funds Injected... Institutions "Proceeding According to Guidelines"

A significant amount of policy funds was also invested in AsWeMake. This is because most of the investments were executed via policy funds, such as funds of funds from Korea Venture Investment Corp., Agricultural Policy Insurance & Finance Service (hereinafter referred to as APFS), and Korea Development Bank.

According to data submitted by Assemblyman Kang Seung-kyu of the People Power Party, approximately 25 billion won was invested via fund of funds models and parent funds from Korea Venture Investment Corp., Korea Development Bank, and APFS. Korea Venture Investment Corp. invested a total of 14.2 billion won through various accounts, including angel, innovation venture, growth, youth, and land and transport innovation. Korea Development Bank invested 9 billion won, and APFS invested about 1.7 billion won. The Korea Institute of Startup & Entrepreneurship Development provided a total of 780 million won in startup commercialization support funds.

Policy loans were also supplied. As of the balance sheet date, Industrial Bank of Korea lent 1.85 billion won, Korea SMEs and Startups Agency provided 773 million won, and the Korea Credit Guarantee Fund guaranteed loans totaling 1.83 billion won. One institution representative stated, "We are receiving reports regarding this matter from management companies, and subsequent procedures will be conducted in accordance with guidelines."

Industry: "Investments Must Be Proven Trustworthy by Data"

The industry has expressed embarrassment about the situation. However, for the time being, it seems inevitable to leave oversight to the autonomy of investee companies. Just last year, there was another incident in which the founder of the braille content startup Sensi, under suspicion of embezzlement, fled overseas. An industry insider commented, "Whenever incidents like this occur, the only thing we can do is examine companies much more meticulously."

Calls for change are also emerging. Kwon Hyukchan, Vice President of Bigbang Angels, said, "We shouldn't simply frame this incident as one company's accounting issue, but use it as an opportunity for the startup investment industry to evolve from 'trust-based investment' to 'data-proven trustworthy investment.' Even at our company, we plan to strengthen systems that allow us to seamlessly verify source data and key cash flows—such as bank accounts, cards, and tax invoices—through the financial and fund management systems that companies use day to day." Another VC executive said, "It is also necessary to further strengthen the role and authority of general partners (GPs) in the audit and due diligence processes of investee companies."

This content was produced with the assistance of AI translation services.