Korean Government Announces $ 858 million Investment in 42 Venture Funds to Foster Innovation

The Korean Ministry of SMEs and Startups, in collaboration with eight other ministries, ministries including the Ministry of Education, the Ministry of Science and ICT, and the Ministry of Culture, Sports and Tourism, revealed the outcomes of the 2023 2nd scheduled selection of funds, with a total of 42 venture funds securing approximately 1.1 trillion won (858 million USD). The announcement stated that these funds will be instrumental in fostering innovation and supporting promising startups across diverse sectors.

The joint initiative was unveiled on March 8, spearheaded by eight ministries, including the Ministry of Education, the Ministry of Science and ICT, and the Ministry of Culture, Sports and Tourism. The Ministry of SMEs and Startups played a pivotal role in this selection, with investments amounting to 829.8 billion won (647 million USD), representing over 70% of the total fund allocation. The funds have been categorized into various areas, catering to the needs of startups at different stages of growth.

One notable addition is the ‘Super Gap Fund,’ introduced this year to boost investments in deep tech startups. This fund secured an impressive 244.2 billion won (190 million USD). Additionally, the ‘General Secondary Fund,’ aimed at revitalizing the mid-term recovery market, secured 233.5 billion won (182 million USD). For startups in their early stages, the ‘Startup Initial Fund’ was allocated 186.7 billion won (145 million USD), while the ‘Scale-up Mid-sized Jump-off Fund’ received 125 billion won (97 million USD). Furthermore, an ‘LP Equity Securitization Fund’ was selected with a scale of 40.4 billion won(31.5 million USD).

The remaining 313.5 billion won (244 million USD) was allocated to new industries and sector funds chosen by seven ministries. Sectors including mid- and low-budget films, tourism, sports, space, future environment, land transportation, social services, and university startups are set to benefit from these investments.

In line with the previous appointment, venture investment promotion incentives will also be applied to sub-funds selected in this second round. Lee Eun-cheong, director-general of venture policy at the Ministry of SMEs and Startups, expressed hope that these initiatives, coupled with the ‘Innovative Venture Startup Fund Support Plan’ introduced earlier this year, will address funding challenges faced by ventures and startups. He said, “Following the ‘Innovative Venture Startup Fund Support Plan’ announced in the second quarter of this year, the parent funds selected for this second round of work will provide a way to resolve the funding difficulties of ventures and startups.”

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