[Value and Returns Together, Women’s Fund] ① VC Investment Growth Trend "Performance from a New Perspective"

"Achieving Long-Term Goals and Returns Simultaneously"
Focus on the Korea Fund of Funds' Investment Project for Women Entrepreneurs
Considering Factors Such as the Highest Proportion of Female Major Shareholders and Executives

As the status of women as economic agents strengthens, new changes have emerged in the investment industry. In the capital market, cases are continuously appearing where long-term visions of gender equality are achieved alongside the essential goal of investment banks (IB) ? profitability ? particularly among venture capital (VC) firms and asset management companies.

According to the IB industry on the 14th and the Venture Investment Company Electronic Disclosure (DIVA), a total of eight VCs in Korea are operating 'women-support' investment funds. Nine funds, including ▲POSCO Technology Investment Women Specialized Investment Fund ▲AVentures W Unicorn Investment Fund ▲Hi Investment Partners DigiBDreamGirls Venture Investment Fund and Surim Women Creative Enterprise Venture Investment Fund ▲Daekyo Investment DKIGrowingStar5 Investment Fund ▲DT&I Investment DTNI Soft Industry Development Investment Fund, have been formed with scales exceeding 10 billion KRW and are actively investing.

"Providing Funding to Underrepresented Companies in the Investment Market, Nurturing Outstanding Female Talent"

In December last year, AVentures formed the AVentures W Unicorn Investment Fund No. 2, the largest in Korea with 32 billion KRW. Despite the VC investment winter, it succeeded in receiving contributions from the Korea Fund of Funds, Shinhan Financial Group, Woori Bank, and Seoul City. The POSCO Women Specialized Investment Fund, launched in 2014 as Korea's first female VC fund, was formed with a total of 10 billion KRW and is approaching maturity at the end of July.

The Ministry of SMEs and Startups' Fund of Funds contribution project for women-owned enterprises was created to provide funding to companies historically marginalized in the investment market and to nurture outstanding female talent. VCs participating in the Fund of Funds contribution project typically invest at least 60% of the fund formation amount in companies where women are founders or majority shareholders, companies with female employees making up 35-40% or more of the workforce, companies recognized for gender equality in employment, or those certified as family-friendly.

This movement is due to the gradual expansion of women's social and economic participation. According to the Statistics Korea Economically Active Population Survey, the female economically active population increased from 11,426,000 in 2015 to 12,817,000 last year. During the same period, the female economic activity participation rate also rose from 51.9% to 55.6%.

"Women’s Funds Align with the Development of the Venture Ecosystem"

Although many believe it is not easy to generate returns aligned with the fund’s purpose, the number of VCs achieving results through women’s funds is increasing. AVentures exited its investment in healthcare specialist Wontec through an IPO within a year. The performance exceeded a 4x multiple and positively impacted the W Unicorn Investment Fund’s results. Hi Investment Partners realized approximately a 6x multiple return by selling part of its stake in semiconductor materials company IVWorks. This was a recovery case conducted considering the maturity of the Surim Women Creative Enterprise Venture Investment Fund.

The increasing attempts at female-led technology startups in Korea, including Kurly, which has joined the unicorn club (unlisted companies valued at over 1 trillion KRW), are also expanding investment opportunities for VCs. A Chief Investment Officer (CIO) of a VC managing a women’s fund said, "Women’s funds can demonstrate strengths in trendy and soft sectors in an era where artificial intelligence (AI) and content are gaining attention," adding, "Not only in design, fashion, beauty, childcare, and household sectors, but female founders also create unprecedented achievements in various fields through new perspectives and meticulous management."

He added, "The development of the capital market comes from diversity," emphasizing, "Not only gender equality but also diversity in industries, stages, and founders ultimately aligns with the positive development direction of the venture ecosystem and capital market."