In the Investment Winter, TIPS Allocates Record 380 Billion Won Budget... Focuses on 'Deep Tech'

Ministry of SMEs and Startups to Recruit 35 Additional TIPS Operators
720 Startup Teams Apply... Enthusiasm Expected to Be High
R&D Funding of 1.5 Billion Won Provided to Deep Tech Companies

The government will promote the public-private partnership startup support project ‘TIPS’ at a record high scale of 380 billion KRW next year. With the increased budget, the number of designated operators and supported companies will also rise, generating strong enthusiasm for participation in the project. In particular, the government plans to focus on nurturing deep tech companies to secure a competitive edge in new industrial sectors.

The Ministry of SMEs and Startups announced that it will recruit about 35 new operators to participate in next year’s TIPS project starting from the 19th. The proposed TIPS budget for next year is 378.2 billion KRW, about a 30% increase compared to this year. As the project scale grows, more operators are needed. Currently, there are 81 TIPS operators. When a government-selected TIPS operator invests 100 million to 200 million KRW in a startup team and provides incubation and mentoring, the startup can receive up to 500 million KRW in research and development (R&D) funds from the government, plus 100 million KRW each for commercialization and overseas marketing support, totaling about 700 million KRW.

Until now, TIPS operators had to qualify as startup planners (accelerators, AC) to apply, but this requirement was abolished through the revision of the Small and Medium Enterprise Startup Support Act in December last year. As a result, various institutions such as universities, large corporations, and mid-sized companies can now participate. The Ministry of SMEs and Startups selected 17 new operators in the first half of this year, among which GS Retail and HiteJinro were chosen as operators without registering as startup planners. This time, the ministry plans to recruit 35 operators, more than double the scale of the first half, which is expected to further expand the TIPS market. In a situation where private investment sentiment is shrinking, the TIPS project is expected to serve as a catalyst for investment in early-stage startups.

An AC official said, "It is quite unusual for the recruitment scale of new operators to exceed 30," adding, "This reflects a policy intention to pursue not only quantitative policy support but also qualitative growth support through additional selection."

The number of startup teams eligible to participate in next year’s TIPS project will increase to a total of 720, including 120 deep tech companies. The newly established deep tech track next year will provide up to 1.5 billion KRW in R&D funds to deep tech startup teams that have attracted more than 300 million KRW in private investment from TIPS operators. Deep tech refers to fields that concentrate advanced technologies, requiring long periods and significant costs for technology utilization. It is a future growth industry where companies worldwide compete globally. However, since it takes a long time to recover investment funds, private investment and support have been relatively passive in Korea compared to the e-commerce and platform industries. Last month, the government announced the ‘Super-gap Startup 1000 Project,’ selecting and nurturing over 1,000 startups challenging super-gap innovation over five years, revealing plans to support deep tech companies.

Researcher Jeong Hwansu of KDB Future Strategy Institute stated, "Investment in deep tech has been increasing recently due to urgent issues such as the climate change crisis and food problems, as well as expectations for pioneering new business markets," adding, "Active investments are underway mainly in the US and European countries to foster deep tech startups." Fueled by the deep tech investment boom, competition among companies around the expanded 380 billion KRW TIPS market is expected to be fierce. Park Jehyeon, co-CEO of New Paradigm Investment, a TIPS operator, said, "TIPS judges evaluate based on the company’s history and experience," emphasizing, "Companies need to appeal their technological advancement, rapid growth, and potential for overseas expansion."