Korea VC Association "Welcomes Increase in Mother Fund Budget"

The Korea Venture Capital Association (KVC Association) stated on the 2nd, "We actively welcome the government's expansion of the Mother Fund's investment budget," and added, "We look forward to continuous support for revitalizing venture investment."

Earlier, the government prepared the budget for the Ministry of SMEs and Startups (MSS) for next year at 15.292 trillion won, an increase of 2.3% (342.3 billion won) compared to this year. The MSS's Small Business Mother Fund (Mother Fund) investment budget was increased by 10.1% (46 billion won) to 500 billion won compared to this year. The total Mother Fund investment budget across all ministries was also slightly increased from 964.9 billion won this year, maintaining a stable investment scale of around 1 trillion won.

Although the global venture investment market has been significantly contracted due to consecutive interest rate hikes recently, the domestic venture fund formation amount and investment performance in the first half of this year showed a recovery trend, increasing by 8.5% and 19.3% respectively compared to the same period last year.

The VC Association has conveyed to the government every year the need to increase the Mother Fund budget and emphasized that the Mother Fund plays an important role in supporting ventures and startups in investment blind spots. In particular, the Mother Fund is expected to greatly contribute to enhancing national competitiveness, including securing core technologies, by leading the expansion of private investment in underserved areas such as deep tech and early-stage investments, which are ultra-gap strategic investment fields.

Meanwhile, the VC Association has actively communicated with both the public and private sectors and achieved results in expanding the inflow of private capital into the venture capital market, such as allowing venture fund investments from the large and small business win-win cooperation fund in the first half of this year. A VC Association official stated, "We plan to take the lead in creating a private-led venture investment ecosystem through various institutional improvements, including allowing venture fund investments from retirement pensions."