Korea’s Ministry of SMEs and Startups has announced the recruitment of private investors for the ‘Startup Korea Fund,’ collaborating with the Fund of Funds. 

This fund structure involves joint investments from various private entities, including the Fund of Funds, large corporations, banks, and venture enterprises. It symbolizes the core philosophy of ‘Startup Korea’—fostering a venture investment ecosystem led by the private sector.

The ministry aims to create a fund of KRW 2 trillion (approximately USD 1.7 billion) over the next four years (’24-’27). They plan to invest KRW 150 billion (approximately USD 127 million) from the Fund of Funds in 2024, targeting a total fund size exceeding KRW 500 billion (approximately USD 425 million). 

Since announcing the ‘Startup Korea Initiative‘ in August of the previous year, the ministry has solidified incentives and investment areas to encourage private investor participation, incorporating feedback from various industry stakeholders.

Through the ‘Fund of Funds – Private Joint Investment Structure,’ the ministry aims to reduce the Fund of Funds’ investment ratio to around 30%. Robust incentives, such as priority loss coverage, are provided to encourage more active private venture investments. 

Eun-cheong Lee, Venture Policy Officer at the Ministry of SMEs and Startups, emphasized that the collaborative structure of the Startup Korea Fund, involving joint investments from the Fund of Funds and the private sector, maximizes the impact of the Fund of Funds. This is expected to be a catalyst for transforming the venture investment market with combined efforts from the public and private sectors.