Establishment of Specialized Investment Fund for Mid-sized Companies... 1 Trillion KRW Scale by 2027

The 1st Mid-sized Enterprise Innovation Fund Formation Agreement Ceremony

The Ministry of Trade, Industry and Energy (Minister Lee Chang-yang, hereinafter referred to as the Ministry) announced on the 9th that it will create Korea's first specialized investment fund for mid-sized companies to support their entry into new businesses. On the same day, the Ministry held the '1st Mid-sized Enterprise Innovation Fund Formation Agreement Ceremony' at The Plaza Hotel in Seoul, attended by First Vice Minister Jang Young-jin, along with the Korea Federation of Mid-sized Enterprises, Korea Institute for Advancement of Technology, and Korea Growth Investment Corporation.

This is the first time a public-private partnership fund focusing on mid-sized companies has been launched. The 1st Mid-sized Enterprise Innovation Fund will be established with 10 billion KRW in capital from mid-sized companies and 40 billion KRW in policy funds, aiming to reach a total size of 100 billion KRW by November this year. The government plans to create a total of 1 trillion KRW worth of specialized funds for mid-sized companies by 2027, starting with the 1st Mid-sized Enterprise Innovation Fund. The Mid-sized Enterprise Innovation Fund will focus on supporting open innovation activities of mid-sized companies to secure future growth engines, such as strengthening technological competitiveness and entering new businesses.

First, to support mid-sized companies facing difficulties in securing new investment funds due to recent interest rate hikes, a policy fund worth 800 billion KRW will be established by 2027. The Mid-sized Enterprise Innovation Fund will begin investments from the first fund in November this year and plans to raise a second fund of around 100 billion KRW within this year, aiming to reach a total of 300 billion KRW by 2025. To support the scale-up of promising mid-sized companies with high growth potential, a 'Scale-up and Mid-sized Leap Fund' worth 500 billion KRW will be promoted over five years from this year to 2027 through capital contributions from the Ministry of SMEs and Startups’ mother fund. Additionally, a private-led fund worth 200 billion KRW will be established by 2024 using 100% private capital, including capital from mid-sized companies.

First Vice Minister Jang Young-jin of the Ministry said, "For our economy to take a new leap forward, mid-sized companies, which are the backbone and middle layer of the industrial ecosystem, need to lead new challenges and innovations such as new businesses and new technologies," adding, "We hope that the fund being established this time will be actively utilized as a catalyst for mid-sized companies to enter new businesses."