20 Billion Won “First Deep”, 100 Billion Won “Scale-up”... Restructuring Special Zone Funds to Foster Regional Deep-tech

Supplying venture capital across the entire cycle from startup to growth...
78% of investments outside the Seoul metropolitan area, accelerating “region-led growth”

The government is creating a series of new funds targeting deep-tech companies located in Research and Development Special Zones. It plans to launch the tentatively named “First Deep” fund worth about 20 billion won in 2026, and then establish an additional “Scale-up” fund worth 100 billion won from 2027 onward, with the aim of supplying venture capital across the entire business cycle from the early startup phase through the growth stage.

The Ministry of Science and ICT and the Innopolis Foundation announced that they will create a new Research and Development Special Zone Fund (Special Zone Fund) that will focus its investments on the founding and growth of deep-tech companies within the Special Zones, in order to support region-led growth.

Reference photo to aid understanding of the article. Photo from The Asia Business Daily database.

20 billion won “First Deep”... Fund life extended to 10-12 years

In 2026, the government will first create the “First Deep” fund worth about 20 billion won, focusing on early-stage deep-tech startups. In particular, it plans to extend the fund life from the existing eight-year structure (four years for investment plus four years for exit) to 10-12 years, and to design it without separating the investment and exit periods, so that early-stage companies can secure long-term growth capital.

Deep-tech companies are in fields where high-level research and development based on science and technology requires a long time and high costs to reach commercialization, but can generate high added value if successful. Taking these characteristics into account, the government plans to shift away from short-term exit-oriented investment toward a “long-term partnership investment” model.

From 2027, the government will sequentially establish the “Scale-up” fund worth 100 billion won. The strategy is to focus investment on growth-stage companies by linking it with Special Zone systems and programs such as research institute spin-offs and companies supported under the Special Zone Promotion Program (R&BD).

The Ministry of Science and ICT and the Innopolis Foundation explained that the Special Zone Fund has so far contributed to revitalizing regional startup ecosystems. Since 2006, they have created 11 funds and invested a total of 453.6 billion won in 267 companies, of which 78% (335.9 billion won) was deployed to companies located outside the Seoul metropolitan area. Among the investee companies, 46 have successfully listed on KOSDAQ.

A representative case cited was G2GBio, which was listed on KOSDAQ in 2025. It received investment from the Special Zone Fund at an ultra-early stage less than one year after its founding, then continued to grow through follow-on investments and succeeded in going public, with its market capitalization surpassing 1 trillion won within one year of listing. G2GBio develops sustained-release microparticles and injectable formulations for the treatment of brain diseases and chronic diseases.

First Vice Minister of Science and ICT Koo Hyukchae said, “For region-led growth, the number of deep-tech companies rooted in local areas must increase, and venture capital that supports them continuously from the startup phase through growth is essential.” He added, “Through the new funds, we will promote the creation of regional deep-tech startups that leverage the excellent research outcomes of the Special Zones, and will actively support the emergence of global unicorns with unrivaled technological advantages from local regions.”