Large Number of VCs Flock to Motefund's 'Culture Account'

Increased Investment Amounts and Diversified Investment Fields
Major Clash Expected Among Culture-Specialized VCs and Comprehensive VCs

[Asia Economy Reporter Kwangho Lee] Interest is heating up in the Korea Venture Investment (KVI) Mother Fund's cultural account. Unlike previous years, the amount of capital contribution has significantly increased, prompting not only cultural content venture capital (VC) firms but also various other VCs to prepare capital contribution proposals. Fierce competition is expected more than ever.

Korea Venture Investment has begun recruiting delegated operators (GPs) for the 2023 first regular capital contribution project under the Mother Fund's cultural account. The budget allocated by the Mother Fund for this cultural account capital contribution project is 247.5 billion KRW. This is about 64 billion KRW more than the 183.5 billion KRW budget for the first regular capital contribution project under the Ministry of SMEs and Startups (MSS) jurisdiction. It is unusual for the cultural account budget in the first regular capital contribution project to exceed the MSS jurisdiction budget.

Last year, the Ministry of Culture, Sports and Tourism's cultural account capital contribution project was divided into first and second rounds, but this year, all the budget was allocated to the first round. While the annual capital contribution budget under the MSS jurisdiction is larger, the cultural account budget is bigger based on the first capital contribution project.

The cultural account budget has been steadily increasing: 108 billion KRW in 2019, 146 billion KRW in 2020, 144 billion KRW in 2021, 164.1 billion KRW in 2022, and 247.5 billion KRW this year.

The capital contribution fields include ▲K-Content IP ▲K-Culture M&A ▲K-Unicorn ▲K-Value ▲K-Culture Win-Win ▲K-Culture General ▲Development of Asian Cultural Hub Cities. They plan to select 15 to 18 GPs in these fields. The capital contribution amount per GP is around 20 to 30 billion KRW. Among these, K-Content IP, K-Unicorn, K-Culture M&A, and K-Culture General are new fields.

The Mother Fund will accept proposals until the 3rd of next month. Prior to this, on the 6th, a briefing session for the cultural account was held with a Q&A session. Due to the increased capital contribution amount, the briefing was crowded. Various operators, including cultural content specialized VCs, participated.

An investment officer from a cultural content VC said, “There was nothing special in this briefing,” and added, “It seems we just need to prepare as usual.” An investment officer from a general VC said, “Although we are not specialized in culture, the diverse capital contribution fields make it worth trying,” and noted, “I am particularly paying attention to K-Culture General.”

The key point to watch is the VC’s strategic positioning. Cultural specialized VCs are expected to propose capital contributions aligned with their main expertise, but general VCs might anticipate a concentration in K-Culture General and may adopt different strategies accordingly.