South Korea Announces $690M Fund of Funds to Boost Startups and SMEs in 2021

South Korea's Ministry of SMEs and Startups, in partnership with KVIC, has announced a KRW 750 billion ($690 million) fund of funds for 2021, with a total venture fund size of more than KRW 1.6 trillion ($1.5 billion).

In addition, the government is accelerating its funding efforts due to a boom in startup and SME funding since the third quarter of this year.

The funds will be divided into eight areas: Smart Korea Project, Regional New Deal Venture, New Technology Fund, Startup Scale-up, SMEs for materials, parts, and equipment, early-stage startups, job creation, and support for SMEs and startups.

The Smart Korea Project, with a fund of KRW 350 billion ($320 million), will focus on zero-contact businesses, biotechnology, and the Green New Deal industries.

In addition, the Regional New Deal Venture will invest KRW 40 billion ($37 million) in four key regional areas to support innovative regional companies and SMEs with promising technologies.

The New Technology Fund, allocated KRW 40 billion ($37 million), aims to invest in growth-stage companies in 5G, AI, data, systemic semiconductors, future vehicles, and bio-healthcare.

The Startup Scale-up Fund of KRW 100 billion ($92 million) will primarily target scale-up stage companies, with an estimated average funding of KRW 5 billion ($4.6 million) per startup.

The SME for Materials, Parts, and Equipment Fund will allocate KRW 60 billion ($55 million) to support 100 specialized companies and technology-based startups.

In addition, early-stage startups will receive KRW 40 billion ($37 million), targeting companies established within the past 36 months. KVIC will directly administer this fund.

Finally, a Social Consideration Program will allocate KRW 120 billion ($110 million) for job creation and support for SMEs and startups.

The initiative will target industries walloped by the COVID-19 pandemic, such as travel and entertainment, and fund a restIn addition, an art program.

In addition, KVIC will directly operate a KRW 20 billion ($18.4 million) job creation fund as a critical policy under President Moon Jae-in's administration.