Korea’s startup ecosystem is taking another concrete step toward asset-based innovation finance. The Korean Intellectual Property Office (KIPO) and Daejeon City have launched a new KRW 15 billion (US$10.8 million) IP Regional Specialization Fund to help patent-rich startups turn technology into investable assets—an initiative signaling Korea’s broader shift toward financing innovation through intellectual property.
Korea Strengthens IP-Based Innovation Finance Through Regional Fund Initiative
The Korean Intellectual Property Office (KIPO) and Daejeon City have launched a KRW 15 billion (~ USD 10.8 million) Intellectual Property (IP) Regional Specialization Fund, a new vehicle designed to support regional innovation companies with strong patent portfolios.
This fund represents the next stage in Korea’s effort to strengthen asset-based innovation finance and accelerate technology commercialization through intellectual property.
Applications for fund management companies will be accepted from November 10 – 21, 2025, through the Korea Venture Investment Corporation (KVIC) website.
Regional IP Fund: Joint Initiative Between KIPO and Daejeon City
The new IP Regional Specialization Fund was jointly established by KIPO and Daejeon Investment Finance, a public investment institution fully funded by Daejeon City and recognized as Korea’s first local government-established venture capital entity.
Initial commitments include KRW 5 billion from KIPO and KRW 2.5 billion from Daejeon Investment Finance, with additional investments to reach the KRW 15 billion target.
The initiative is a follow-up to the MOU signed between KIPO and Daejeon City to build a regional IP virtuous cycle ecosystem, connecting technology ownership to commercialization capacity.
Its core purpose is to provide early-stage funding to promising Daejeon-based innovation enterprises and to establish a model for IP-driven regional growth that can be replicated across Korea.
Investment Focus and Strategic Industries
The fund will focus its investments on two categories:
- Patent technology commercialization companies that have completed IP valuation before investment.
- Firms within Daejeon’s six strategic industries (ABCDQR):
- Aerospace
- Biohealth
- Chip (Nano/Semiconductor)
- Defense
- Quantum
- Robot/Drone
By targeting these sectors, the fund seeks to connect patent-rich innovators with scalable business opportunities in Korea’s emerging deep-tech landscape.
Recent attention has also turned to Daejeon’s innovation infrastructure following the September 2025 fire at the National Information Resources Service (NIRS) data center, which temporarily disrupted numerous government systems.
While the new IP Regional Fund is officially focused on commercialization rather than recovery, its timing underscores Daejeon’s determination to rebuild confidence in its technology base and reaffirm its leadership as a national innovation hub.
KIPO – Daejeon Regional IP Fund: Central – Local Model Collaboration
According to Kim Jeong-gyun, Director-General of KIPO’s Intellectual Property Policy Bureau,
“This joint fund marks a strong model of collaboration between central and local governments to identify regional companies with excellent patents and help them grow into innovation-driven enterprises.
KIPO will continue to support advanced local companies in securing IP-based commercialization capital so they can emerge as globally competitive small giants.”
Regional Innovation Meets IP Finance
The Daejeon fund is part of a broader national transition toward asset-based innovation finance, where intellectual property becomes collateral for growth capital. This approach aligns with Korea’s evolving innovation policy, which aims to bridge the gap between R&D excellence and commercialization — especially in deep-tech and manufacturing sectors.
The establishment of this regional IP fund also strengthens Daejeon’s role as a science and technology hub, home to KAIST, the Daedeok Innopolis, and multiple national R&D institutions. By embedding IP finance mechanisms into regional development, KIPO and Daejeon City are effectively linking Korea’s patent strength with venture capital scalability.
Such initiatives echo the government’s broader strategy to build innovation-led regional economies, encouraging public-private co-investment and cross-border collaboration in future phases.
And for international investors and policymakers, this new regional fund collaboration shows that Korea is institutionalizing IP as an investable asset class, aligning with global trends seen in markets like Japan, Singapore, and the United States.
Building Korea’s Model for IP-Based Venture Growth
The creation of the ₩15 billion KIPO – Daejeon fund marks more than a regional investment milestone. It reflects Korea’s strategic pivot toward a financing model where intellectual property powers innovation capital, enabling startups to raise funds not just on market promise but on the tangible value of their patents.
As IP finance continues to evolve into a cornerstone of Korea’s technology commercialization policy, the Daejeon initiative could serve as a national benchmark — showing how regional governments, public investors, and innovation agencies can work together to turn intellectual assets into global competitiveness.
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