Fintech Innovation Fund Launches This Month... 85.5 Billion KRW Supported This Year Alone

Concentrated Investment of 300 Billion KRW Over 4 Years... Expanded to 500 Billion KRW Over 6 Years Based on Fund Management and Demand

[Asia Economy Reporter Kangwook Cho] Starting this month, the 'Fintech Innovation Fund,' which will focus on investing a total of 300 billion KRW over four years in innovative fintech companies, will be fully launched. Beginning with the first investment execution of 20 billion KRW this month, more than 85.5 billion KRW is expected to be injected within this year alone.

On the 10th, the Financial Services Commission announced that it decided to expedite the execution of the Fintech Innovation Fund to alleviate the difficulties fintech companies face in attracting investments due to the COVID-19 pandemic.

The Fintech Innovation Fund is a privately-led fund established at the end of last year with a total size of 300 billion KRW over four years, involving major financial groups such as KB, NH, Shinhan, Woori, Hana, regional banks, the Bank권 Youth Startup Foundation, and Koscom. This fund provides tailored investments according to growth stages from early startup to scale-up, and plans to expand the operation scale of the parent fund if necessary based on market trends.

On the 23rd of last month, the first-year sub-fund managers of the Fintech Innovation Fund were selected, and direct investments worth 20 billion KRW are scheduled this month, marking the official start of fintech investments. Investments are divided into early-stage fintech startups within five years of establishment and scale-up (expansion) and overseas expansion support investments, with 150 billion KRW allocated to each.

This year, more than 48 billion KRW will be supplied by creating three or more sub-funds for early-stage investments. Korea Investment Partners and KB Investment were selected as blind sub-fund managers and will begin full-scale investments from the third quarter. In the second quarter, at least one additional manager specializing in accelerator or overseas fintech company investments will be selected. Accordingly, in the fourth quarter, the operation of sub-funds specialized in very early-stage and overseas investments is also expected to commence.

For scale-up and overseas expansion investments, more than 37.5 billion KRW will be supplied this year. This month, a total investment of 20 billion KRW will be executed for three fintech companies specializing in big data, blockchain, and overseas-based financial platforms, together with private investors. Additionally, at least 17.5 billion KRW in growth capital will be supplied within this year.

The financial authorities plan to expand the Fintech Innovation Fund to 500 billion KRW over six years while monitoring fund operation trends and market demand.

A Financial Services Commission official stated, "We will accelerate fintech innovation by discovering and investing in innovative fintech companies across various fields," adding, "We plan to continuously identify and improve difficulties such as investment challenges and digital regulations through regular meetings with financial authorities, Fintech Innovation Fund contributors, and investee companies."