Korea has launched its first corporate-backed regional mother fund as Gyeongsangbuk-do (North Gyeongsang) Province and POSCO Group join forces to stimulate local startup growth and balance innovation across regions. The KRW 1.011 trillion “Gyeongbuk – POSCO Innovation Growth Venture Fund” sets a new milestone for public–private collaboration, marking a major step in decentralizing Korea’s venture capital ecosystem.

Gyeongbuk and POSCO Form ₩1 Trillion Innovation Growth Fund

The Ministry of SMEs and Startups (MSS), POSCO Group, and the Gyeongsangbuk-do (North Gyeongsang) Provincial Government officially launched the “Gyeongbuk–POSCO Innovation Growth Venture Fund” on October 22 at the Pohang ChangeUp Ground.

The fund, totaling KRW 1.011 trillion (approx. USD 730 million), includes KRW 600 billion from the government’s Fund of Funds (Mother Fund) as anchor capital, combined with investments from POSCO Group, Gyeongbuk Province, four regional city governments, and NH NongHyup Bank.

This marks the first time a major conglomerate has joined a regional mother fund, a national initiative that the MSS began in 2021 to strengthen local startup ecosystems outside Seoul.

The Gyeongbuk fund will finalize its investment focus in November and begin forming sub-funds totaling KRW 2 trillion (~USD 1.45 billion) over the next two years, with KRW 800 billion earmarked for startups and relocated companies within the province.

Gyeongbuk Regional Mother Fund: Expanding Korea’s Regional Venture Investment Model

The Ministry of SMEs and Startups has now completed the establishment of four regional mother funds: Chungnam, Busan, Gangwon, and Gyeongbuk—representing a combined KRW 4 trillion pool.

Through these established regional mother fund initiatives, the ministry plans to launch KRW 7 trillion in venture sub-funds by the end of 2025 to drive balanced regional innovation and reduce the investment gap between the capital region and local economies.

The previous regional mother fund initiatives were each designed to reflect local economic strengths and policy goals. Gangwon focused on nurturing seven advanced strategic industries, Busan prioritized scale-ups and smart manufacturing, while Chungnam centered its first large-scale regional fund on producing unicorn startups and developing its “Bay Valley” innovation hub.

As for Gyeongbuk, the fund is expected to serve as a central growth engine for its strategic industries, including advanced materials, secondary batteries, AI-driven manufacturing, and green energy technologies.

The provincial government aims to align this initiative with its long-term KRW 10 trillion “Gyeongbuk G-Star Fund” program by 2034 to accelerate industrial transformation and startup growth in cities such as Pohang, Gumi, and Gyeongsan.

Public–Private Partnership for Balanced Growth

Minister of SMEs and Startups Han Seong-sook highlighted the significance of the collaboration, saying,

“The Gyeongbuk–POSCO Innovation Growth Venture Fund is highly meaningful as the first regional mother fund to include a major local conglomerate like POSCO.
We will use this model to encourage more regional investors and institutions to participate in future fund formations.”

Gyeongbuk Governor Lee Cheol-woo also emphasized,

“This large-scale fund will inject new vitality into the province’s venture ecosystem. We will work closely with the ministry, POSCO, and local governments to discover promising companies and support their scale-up.”

At the same time, POSCO Holdings CEO Kim Hak-dong emphasized that the group’s participation reflects its commitment to open innovation,

 “POSCO will continue collaborating with startups and regional partners to identify future growth engines and build a sustainable innovation ecosystem.”

Corporate Capital Enters Korea’s Regional VC Landscape

The participation of POSCO, Korea’s largest steel and industrial group, signals a major shift in how regional venture ecosystems are being financed. By integrating corporate capital into public-led regional funds, Korea is diversifying its venture capital structure, reducing dependence on Seoul-based investors, and embedding industrial expertise directly into early-stage funding cycles.

This new regional mother fund provides startups in Gyeongbuk unprecedented access to both capital and corporate networks, especially in fields aligned with POSCO’s strategic domains such as steel, batteries, hydrogen, and smart manufacturing.

The fund also supports Korea’s broader strategy to distribute startup infrastructure nationwide, reinforcing innovation hubs like Pohang’s ChangeUp Ground and positioning Gyeongbuk as a model for regional economic revitalization through entrepreneurship.

Korea’s New Template for Regional Innovation

In the end, the Gyeongbuk–POSCO collaboration under Korea’s latest regional mother fund initiative represents a turning point in the country’s venture capital evolution. It demonstrates how government, local authorities, and major corporations can co-invest to cultivate innovation outside the capital region.

If successful, this collaborative model could redefine how regional startup ecosystems attract private capital, offering a blueprint for sustainable economic growth driven by local innovation, public trust, and corporate participation.

With KRW 2 trillion in planned follow-on investments and Korea’s first corporate-backed regional mother fund now operational, Gyeongbuk is positioning itself at the forefront of the country’s new era of decentralized, partnership-driven startup growth.

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