Motae Fund to Double Venture Investment in Non-Capital Regions

Ministry of SMEs and Startups Announces 'Local Era Venture Fund Creation Plan'

Non-capital region venture investment will be doubled to 2 trillion won by 2027. The share of non-capital regions in total venture investment will also be significantly expanded from the current around 20% to 30%. This is to ensure that excellent local ventures and startups can grow through sufficient investment.

The Ministry of SMEs and Startups announced the 'Local Era Venture Fund Creation Plan,' including this content, at the 8th Central-Local Cooperation Meeting held at Gangwon Provincial Office on the 6th.

First, a 1 trillion won scale Local Era Venture Fund will be newly created over three years starting in 2025. Using the mother fund's investment as seed money, local governments, local banks, and regional anchor companies will participate. To this end, the mother fund's investment in the local sector was doubled from 100 billion won in 2024 to 200 billion won in 2025, making it the largest ever. The Ministry of the Interior and Safety's Local Extinction Response Fund will also participate as an investor, promoting investment in depopulated areas through the ‘Population Vitality Fund,’ which is part of the Local Era Venture Fund.

Additionally, to lead balanced venture investment, support will be provided to ensure that at least one Local Era Venture Fund is established in each of the 14 non-capital cities and provinces. Priority will be given to regions that have secured private investment intentions from local banks and regional anchor companies, and the allocation of mother fund investments will be increased proportionally to the size of local investments.

Also, to encourage banks to invest more boldly in ventures, a risk weight exemption (100%) will be applied to policy-purpose venture funds that meet certain conditions. The newly established Local Era Venture Fund will also benefit from this risk weight exemption, significantly reducing the participation burden for local banks and others. To activate early-stage local investment, the corporate investment limit for private investment associations focusing on local investments will be raised from the existing 30% to 40%. Local specialized venture capital will also be fostered by giving preference to venture capital firms located in local areas when selecting operators for the Local Era Venture Fund.

A ‘Regional Venture Investment Council’ involving the Ministry of SMEs and Startups, the Ministry of the Interior and Safety, and local governments will also be newly established. This is to regularly discuss central-local cooperation measures and to form an investor network within the region. As a hub for creating a regional venture boom, the Korea Venture Investment regional offices will be expanded, and specialized training programs will be introduced to enhance the understanding of local government and regional support institution managers.

Minister Oh Young-joo said, “Since its launch, the mother fund has invested a total of 600 billion won in the local sector over the past 20 years. To dramatically expand local venture investment, we plan to invest a comparable amount in local areas over the next three years,” adding, “Through the newly established ‘Local Era Venture Fund,’ we will create at least one dedicated venture fund in all 14 non-capital cities and provinces, ensuring that any local venture or startup has the opportunity to attract investment and leap forward as a unicorn company.”