Growth Finance '1st Mid-sized Enterprise Innovation Fund' GP Selected
Forming a 100 Billion KRW Fund After Overcoming 4:1 Competition
KOSDAQ-listed venture capital (VC) firm Daesung Startup Investment is partnering with KB Securities to establish a new fund. This fund will serve as capital for investing in mid-sized companies rather than venture firms.
According to the investment banking (IB) industry on the 19th, Daesung Startup Investment and KB Securities were selected as the final general partners (GP) in the first round of the ‘1st Mid-sized Enterprise Innovation Fund’ contribution project conducted by Korea Growth Investment Corporation (Growth Finance), beating competitors such as L&S Venture Capital-Reinvestment and LK Investment Partners. The fund currently being promoted is tentatively named ‘KB-Daesung Mid-sized Innovation Investment Association.’
The anchor limited partner (LP), Growth Finance, will contribute 50 billion KRW. This includes 40 billion KRW from policy funds of the Ministry of Trade, Industry and Energy (Industrial Technology Innovation Specialized Fund) and 10 billion KRW combined from mid-sized companies YG-1, SD Biosensor, Korea Carbon, and SIMPAC.
In addition, Daesung Startup Investment and KB Securities plan to each raise 30 billion KRW to form a blind fund totaling approximately 110 billion KRW. KB Securities has already secured a letter of intent (LOI) for a 10 billion KRW contribution from KB Kookmin Bank. Daesung Startup Investment has also secured LOIs from financial institutions.
Despite a contraction in investment sentiment, this rapid securing of fund capital is being positively evaluated. Since they have secured funds through policy capital and financial institutions along with their GP selection, it is expected that the fund will be successfully established within the six-month deadline. An increase in the fund size is also under consideration.
The key fund management personnel is Director Lim Young-cheol of Daesung Startup Investment. Director Lim previously worked in research and development at Samsung Electronics’ semiconductor division before becoming a venture capitalist at Capital One. He later gained experience at Eugene Investment & Securities and P&PI Investment. He is especially recognized for his expertise in the materials, parts, and equipment (SoBuJang), energy infrastructure, mobility, and fabless semiconductor sectors.
The primary investment targets of this fund are domestic small and mid-sized enterprises (excluding companies belonging to mutual investment restricted corporate groups) and outstanding technology companies. At least 60% of the total committed amount must be invested in mid-sized companies and small businesses conducting open innovation with mid-sized companies or manufacturing companies and mid-sized companies performing open innovation with other companies or institutions. For outstanding technology companies, the target must be a company that has engaged in technology cooperation activities such as technology transfer or has received a TCB (Technology Credit Bureau) rating of grade 5 or higher from a technology evaluation agency.
Daesung Startup Investment is steadily establishing new funds. Previously, it was selected as the final GP for the first regular contribution (cultural account) K-Content IP sector conducted by Korea Venture Investment Corp and is currently forming a fund of approximately 60 billion KRW. The firm plans to steadily increase its funds to achieve assets under management (AUM) of 1 trillion KRW by 2028.
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