South Korea Invests $1.42B in VC Funds for Startups 2026

Sejong - South Korea will invest KRW 2.1 trillion (US$ 1.42 billion) in government funds to establish KRW 4.4 trillion (US$ 2.99 billion) in venture capital funds for 2026, the Ministry of SMEs and Startups announced Friday.

The program involves the Ministry of SMEs and Startups, the Ministry of Culture, Sports and Tourism, the Ministry of Oceans and Fisheries, and Korea Venture Investment Corp., according to the ministry's first regular investment announcement for 2026.

The Ministry of SMEs and Startups will provide KRW 1.6 trillion (US$ 1.09 billion) to create KRW 3.6 trillion (US$ 2.44 billion) in total funds.

Of this amount, KRW 550 billion (US$ 373 million) will go to the "Next-Generation Unicorn Development Project" targeting artificial intelligence and deep-tech startups, with a total fund formation goal of KRW 1.3 trillion (US$ 882 million).

The ministry will allocate KRW 740 billion (US$ 502 million) to startup and scale-up funds and establish a "Unicorn Fund" to invest in and provide loans exceeding KRW 60 billion (US$ 41 million) to approximately 5 unicorn candidates through public-private partnerships.

Overseas expansion funds will receive KRW 250 billion (US$ 170 million) to support the company's globalization through large-scale investments from foreign venture capital firms.

Regional growth funds will receive KRW 230 billion (US$ 156 million), with plans to create over KRW 3.5 trillion (US$ 2.37 billion) in sub-funds by 2030, the ministry said.

Global funds will receive KRW 130 billion (US$ 88 million) in government investment, bringing total funds to over KRW 1 trillion (US$ 678 million).

The ministry plans to establish an ad hoc investment program with major investment firms and to create a global parent fund in Singapore in the second half of the year, operating a KRW 295 billion (US$ 200 million) fund by 2027.

Early-stage startup funds will receive KRW 200 billion (US$ 136 million), while restart funds will get KRW 120 billion (US$ 81 million).

Youth entrepreneurship and women-owned business sectors will receive KRW 40 billion (US$ 27 million) and KRW 10 billion (US$ 7 million), respectively.

For impact investments, the ministry will require reporting on the social value creation status of investee companies.

The ministry will establish KRW 200 billion (US$ 136 million) in secondary funds and require the acquisition of at least 10 percent of limited partner stakes to increase liquidity in shares.

Business succession, merger, and acquisition funds will be formed at KRW 100 billion (US$ 68 million).

The Ministry of Culture, Sports and Tourism will invest KRW 499 billion (US$ 339 million) to form KRW 731.8 billion (US$ 497 million) in funds.

Intellectual property funds and cultural technology funds have formation targets of KRW 200 billion (US$ 136 million) and KRW 100 billion (US$ 68 million), respectively.

The Korean film main investment fund allocation increased to KRW 56.7 billion (US$ 38 million) this year from KRW 39.6 billion (US$ 27 million) last year.

The Ministry of Oceans and Fisheries will invest KRW 15 billion (US$ 10 million) to establish a KRW 21.5 billion (US$ 15 million) marine lifestyle specialized fund targeting marine companies outside the metropolitan area, according to the ministry.