Startup Korea Fund Launched: "Aiming to Be the Most Successful Venture Fund Ever"

Fund Launch Ceremony Held on the Morning of the 24th
Over 300 Billion KRW Invested Privately This Year

A 2 trillion KRW-scale 'Startup Korea Fund,' jointly funded by the public and private sectors, has been launched. This year, approximately 800 billion KRW venture fund will be created through 300 billion KRW of private investment.

Minister Oh Young-joo of the Ministry of SMEs and Startups
[Photo by Yonhap News]

On the morning of the 24th, Oh Young-joo, Minister of SMEs and Startups, stated at the 'Startup Korea Fund Launch Ceremony' held at Hotel Naru Seoul M Gallery in Mapo-gu, Seoul, “Korea’s venture and startup sector has enough potential to lead the global market, having won the most CES Innovation Awards worldwide this year,” adding, “We expect the Startup Korea Fund to become the most successful venture fund ever, enabling more companies and financial institutions to easily and boldly invest in our ventures and startups.”

The Startup Korea Fund is a symbolic fund jointly established by large corporations, financial institutions, small and medium enterprises, and the government to foster a vibrant venture investment environment. Its most distinctive feature is that the government provides enhanced incentives such as first-loss coverage, bonus points in win-win growth evaluations, and government awards to encourage private sector bold venture investments. While lowering the government’s share of funding, the fund doubles the effect of attracting private capital by increasing the proportion of private funds. Unlike typical mother fund investment projects where the government finances about 60%, the Startup Korea Fund consists of 30% government funds and 70% private capital.

This year, 21 private investors will contribute more than 300 billion KRW. Adding over 200 billion KRW from government funds, a total of more than 500 billion KRW will be jointly invested by the public and private sectors. Through this, an approximately 800 billion KRW venture fund will be created to focus investments on ventures and startups pioneering the global market based on innovative technologies. The government announced last year its goal to raise more than 2 trillion KRW for the Startup Korea Fund by 2027.

The core investment areas are divided into Super-gap, Secondary, and K-Global. Super-gap includes bio-health, future mobility, robotics, cybersecurity and networks, system semiconductors, big data, and artificial intelligence (AI). Other eligible sub-funds include general secondary funds for existing stock investments and sub-funds investing in overseas corporations where Korean founders hold a certain minimum equity stake.

Notably, this year, seven companies including Hanwha TotalEnergies and Kakao Mobility are participating in venture funds for the first time through the Startup Korea Fund. Other companies have also expanded their investment scale compared to last year. Among the 21 private investors, excluding five financial institutions, the venture fund investment scale of 16 companies increased from 12.5 billion KRW last year to 140 billion KRW this year.