Launch of Startup Korea Fund... 800 Billion KRW Raised This Year (Comprehensive)

Launch Ceremony of Startup Korea Fund Held on the 24th
7 Companies Participate in Venture Fund for the First Time

The 'Startup Korea Fund,' a 2 trillion won-scale fund jointly invested by the public and private sectors, was launched on the 24th. This year, it plans to create a venture fund worth about 800 billion won through 300 billion won of private investment. Notably, seven companies participated in the venture fund for the first time, drawing attention.

Oh Young-joo, Minister of SMEs and Startups (center), is taking a commemorative photo with representatives of private investment companies at the 'Startup Korea Fund Launch Ceremony' held on the morning of the 24th at Hotel Naru Seoul M Gallery in Mapo-gu, Seoul.
[Photo by Ministry of SMEs and Startups]

The Startup Korea Fund is a symbolic fund jointly established by large corporations, financial institutions, small and medium-sized enterprises, and the government to foster a vibrant venture investment environment. The government’s key feature is providing enhanced incentives such as first-loss coverage, co-growth evaluation bonus points, and government awards to encourage the private sector to boldly engage in venture investment. While lowering the government's share of investment, the fund doubled the effect of attracting private capital by increasing the proportion of private funds. Unlike the typical mother fund investment projects where the government invests about 60%, the Startup Korea Fund is composed of 30% government funds and 70% private capital.

This year, 21 private investors will invest more than 300 billion won. Adding over 200 billion won of government funds, a total of more than 500 billion won will be jointly invested by the public and private sectors. Through this, an approximately 800 billion won venture fund will be created, focusing on investing in ventures and startups pioneering global markets based on innovative technologies. The government announced last year its goal to raise more than 2 trillion won 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 the purpose of investing in existing shares and sub-funds investing in overseas corporations where Korean founders hold a certain percentage of shares.

Especially this year, seven companies including Hanwha TotalEnergies, Kakao Mobility, and Viva Republica are participating in the Startup Korea Fund and venture funds for the first time. Other companies 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 won last year to 140 billion won this year.

Oh Young-joo, Minister of the Ministry of SMEs and Startups, expressed confidence in success at the 'Startup Korea Fund Launch Ceremony' held at Hotel Naru Seoul M Gallery in Mapo-gu, Seoul, on the morning of the day. Minister Oh said, “South Korea won 8 out of 27 CES Innovation Awards this year, making it the country with the most awards worldwide. Among these 8 awards, ventures and startups won 7,” emphasizing, “This clearly shows who the protagonists of our future economy are.”

Minister Oh continued, “Since announcing the comprehensive Startup Korea plan last August, the South Korean government has been dedicated to realizing the vision of becoming the world’s top startup nation,” and explained, “The Korea Startup Fund fully embodies the two philosophies of a dynamic venture investment ecosystem led by the private sector and the realization of a global startup powerhouse, which are the core of the Startup Korea comprehensive plan.”

Minister Oh added, “Creating a world-leading advanced investment ecosystem cannot be achieved by government efforts alone. True leaps can be made when industrial capital, financial capital, and even global capital participate,” and said, “If we join forces, I am confident that the Startup Korea Fund will become the most successful venture fund ever.”

Participating companies expressed their expectations. Lee Ki-sung, Executive Director of Chong Kun Dang Holdings, said, “The bio sector faces much longer cycles from R&D, product approval, production, to sales than other fields, so it is understood to have greater difficulties,” and added, “I hope this fund succeeds and helps many companies go public and generate sales and profits.”

Seo Hyun-woo, Vice President of Viva Republica, explained, “Toss also received venture fund support during its growth process,” and said, “Now as a senior startup, participating in the fund has more strategic than financial significance. We actively hope that supporting strategically will help the startup ecosystem grow together.”

Ryu Geung-seon, CEO of Kakao Mobility, also said, “We have invested in various startups and directly invested 35 billion won in autonomous driving, but as we are not an investment-specialized company, we needed an environment to find and nurture better companies, so we saw the Startup Korea Fund as helpful,” and added, “I hope an environment where startups can grow like Kakao continues to be discovered and that more Kakao-like companies will be created through the Startup Korea Fund.”