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Gov't Commits $1.3B to Jumpstart Venture Investments in 2024

Photo by Ethan Brooke / Unsplash

Seoul, South Korea - The Ministry of SMEs and Startups (MSS) unveiled the details of its 2024 Fund of Funds 1st Regular Investment Call, outlining a significant commitment to boost South Korea's venture investment market. 

Total investment:

KRW 910 billion was allocated in the first round, targeting a total fund size of KRW 1.7 trillion.

This represents a total allocation of the 2024 budget, highlighting the government's proactive approach.

Focus Areas:

  • Global Fund: Record investment of KRW 150 billion to attract foreign capital to domestic startups, targeting a fund of over KRW 1 trillion.
  • Regional Venture Fund: Historic high of KRW 100 billion for ventures and startups outside the capital region.
  • Rookie League: Over KRW 1 billion to support new and small venture capital firms with innovative investment proposals.

Regional breakdown:

  • Regional Innovation Venture Fund: KRW 550 billion, established jointly with local governments and public institutions.
  • Regional Early Stage Fund: KRW 200 billion for regional entrepreneurs and technology holding companies.
  • Raicon Fund: KRW 150 billion focused on entrepreneur-led small businesses in local areas.

Support for underserved sectors:

  • Women: KRW 167 billion for women-owned businesses.
  • Youth entrepreneurship: KRW 667 billion to support young entrepreneurs.
  • Recovering businesses: KRW 500 billion for companies recovering from economic challenges.
  • Impact investments: KRW 333 billion for projects with positive social and environmental impact.

Operational efficiency:

  • Accelerate fund formation: Venture capital firms will be evaluated primarily on their potential for rapid fund formation.
  • Strict timeline: Funds must be formed within three months of the first investment call, with unformed funds to be reallocated in July 2024.
  • Temporary waiver of penalties: No penalties for failure to form funds in 2024 to reduce the burden on venture capital firms.
  • Accountability and Transparency: Priority for active investors: Venture capital firms with a strong track record of investing in 2023 will be given priority for funding.
  • Incentives for continued investment: Measures to encourage continued investment by funded companies.
  • Post-Management Committee: Establishment of a committee to oversee fund management and ensure accountability.

Minister Oh Young-ju, emphasizing the urgency of market recovery, stated that the ministry aims to quickly finalize fund management companies and establish funds in the first half of the year, allowing for full-scale investment execution in the second half. 

This ambitious plan positions the 2024 Fund of Funds as a vital driver of the Startup Korea initiative, which aims to revitalize Korea's venture ecosystem and boost its global competitiveness.