Seocho District Launches Full-Scale Operation of 110 Billion Won "AI Startup Fund"

Business Agreement Signed with Seoul Business Agency
Seocho District to Launch 110 Billion Won AI Startup Fund
Focused Investment in Yangjae AI Special Zone and ICT Companies
Initiatives to Foster Local AI Startups and Build an Innovative Ecosystem

Seocho District in Seoul announced on June 27 that it had signed a business agreement with the Seoul Business Agency on June 26 to operate the "Seocho AI Startup Fund," which is worth 110 billion won.

After the Yangjae and Umyeon-dong areas were designated as the nation's first artificial intelligence (AI) special zone in November last year, the district has been making every effort this year to foster related industries centered on this area. Through this agreement, the district aims to enhance professionalism and efficiency in full-scale fund operation by cooperating with the Seoul Business Agency, which has expertise in establishing and managing venture investment association funds.

Commemorative photo of the business agreement ceremony (left: Hyunwoo Kim, CEO of Seoul Business Agency; right: Seongsu Jeon, Mayor of Seocho District). Provided by Seocho District.

Seocho District plans to invest a total of 10 billion won over five years until 2029 to create a fund worth 110 billion won, with a focus on supporting AI startups. This year, the district will contribute 3 billion won and aims to form a fund of more than 30 billion won by attracting public mother funds and private investment capital. To this end, the district revised the "Ordinance on the Promotion of Small and Medium Enterprises Fund" in March to provide a legal basis for using the fund for startup investment, and completed administrative procedures such as obtaining approval from the district council.

Based on this business agreement, Seocho District and the Seoul Business Agency will enter into full-scale fund operation starting in the second half of the year, including recruiting fund management companies through close cooperation. Fund management companies will be required to invest at least 6 billion won, which is 200% of this year's committed capital, in AI and ICT startups with high growth potential located in Yangjae or Seocho District. The district plans to select fund managers by awarding additional points to those who propose higher total fund targets and higher mandatory investment ratios.

The Yangjae AI Special Zone, the main investment target of the fund, is currently home to about 90 AI startups. Including the ICT Specific Development Promotion Zone, which is scheduled for designation in December this year, and the surrounding areas, there are about 500 AI and ICT companies based in this region. Through fund operation, the district aims to provide a foundation for local startups to grow into unicorn companies and to create an industrial ecosystem where businesses can thrive.

In addition to establishing the fund, Seocho District is pursuing various projects to foster the overall AI industry and nurture startups. The district is currently implementing a cloud-based computing infrastructure support project worth 220 million won for 14 AI research and development companies in the Yangjae and Umyeon-dong areas. To facilitate this, the district signed a business agreement in May with Amazon Web Services Korea (AWS), the world's leading cloud company.

In addition, the "Excellent Company Center" within the Gangnam Data Center plans to complete interior construction and company selection procedures by the end of this year, with the goal of attracting about 40 startups with 20 to 40 employees each.

Hyunwoo Kim, CEO of Seoul Business Agency, who attended the signing ceremony, stated, "AI will accelerate innovation in all fields, not just in specific industries," and added, "Through cooperation with Seocho District, we will work to vitalize the AI ecosystem and help create companies with innovative value."

Seongsu Jeon, Mayor of Seocho District, emphasized, "Following last year's designation of the Yangjae AI Special Zone, this year marks an important first year in laying a solid foundation for successful special zone operation," and continued, "Together with the Seoul Business Agency, we will strengthen the local AI ecosystem and spare no effort in supporting promising AI startups so that they can grow into globally competitive companies."