[Asia Economy Reporter Kiho Sung] Korea Development Bank announced on the 24th that it has raised 9.8 trillion KRW over the past three years through a growth support fund to foster an innovative startup ecosystem. This exceeds the target amount of 8 trillion KRW.
This fund, initiated in January 2018 under the government's 'Plan for Establishing and Operating Innovation Venture Funds,' aimed to raise a total of 8 trillion KRW over three years. It was organized by KDB and Korea Growth Investment Corporation to support small and medium (venture) enterprises and mid-sized companies in the growth stage, as well as sectors related to the Fourth Industrial Revolution.
Over the three years, leading domestic PE and VC firms such as IMM, JKL, Skylake, Atinum, LB Investment, and DSC were selected to manage 55 funds, with a cumulative investment execution amounting to 3.4 trillion KRW.
The third-year funds, mostly established in the fourth quarter of last year, have invested 10% despite being in the early stages of investment, while the first and second-year funds, which have entered full-scale investment, have utilized 49%, showing favorable investment performance.
In particular, KDB stated that despite the COVID-19 situation, more than 2 trillion KRW was invested in over 380 innovative companies last year through 'investment promotion incentives' and other measures.
Notably, large-scale venture capital was supplied to companies leading the post-COVID era such as SD Biosensor (COVID-19 diagnostic kits), Zigbang (online real estate), Kakao VX (screen golf), Bucketplace (online interior design), and Watcha (OTT). Additionally, it played a significant role in nurturing domestic unicorn companies like WEMAKEPRICE (e-commerce) and SOCAR (car sharing).
Meanwhile, the growth support fund encouraged active venture investment and follow-up investments for scale-up by promoting fund enlargement and strengthening private sector autonomy. To attract excellent fund managers and private investors, various incentives were provided, such as transferring KDB’s excess returns to private investors or reinforcing subordinated positions, which led to high private sector participation despite being a policy fund.
A KDB official stated, “The 10 trillion KRW scale growth support fund is an achievement made by all participants in the domestic PE and VC markets,” and added, “The 55 funds will serve as a strong support group for fostering innovative companies and new businesses for the future of Korea’s industry.”
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