The Ministry of SMEs and Startups (MSS) of South Korea announced on the 16th that it would swiftly implement initiatives discussed during a roundtable on the “2025 Direction for FoF Investment and Venture Investment Promotion.” The event was held at Korea Venture Investment in Seocho-gu, Seoul.

The meeting, chaired by Minister Oh Young-joo, included key figures such as Yoon Gun-soo, President of the Korea Venture Capital Association, representatives from large and small venture capital firms, and the Ulsan Creative Economy Innovation Center (Ulsan CCEI), which focuses on nurturing regional startups and supporting early-stage investments.

This year, MSS plans to invest approximately $770 million (KRW 1 trillion) through the Korea Fund of Funds (FoF) to support the creation of venture funds worth $1.46 billion (KRW 1.9 trillion). A major initiative includes establishing a “Global Fund” exceeding $770 million (KRW 1 trillion) to attract international investments for domestic startups. The fund will focus on diversified areas such as AI, climate tech, and secondary markets, with strategies tailored to the preferred investment sectors of each target country.

In addition, MSS will allocate a record $154 million (KRW 200 billion) to regional ventures, following up on the “Regional Era Venture Fund Plan” announced in November 2024. Over the next three years (2025–2027), MSS aims to create a “Regional Era Venture Fund” of more than $770 million (KRW 1 trillion) in collaboration with local governments, regional banks, and anchor enterprises. To address the slowdown in early-stage investments, MSS has increased its allocation for early-stage startups by 25% to $77 million (KRW 100 billion). Venture fund operators prioritizing early-stage investments will receive preferential treatment in the selection process.

The FoF investment framework will also undergo market-friendly reforms. To invigorate the secondary market, MSS will temporarily recognize secondary share acquisitions as a primary investment purpose for two years (2025–2026), with a cap of 20%. Additionally, management fee structures will be overhauled to encourage more ambitious investments by venture capital firms.

During the meeting, participants from the venture capital industry proposed several measures, including introducing new investment participants such as retirement funds, supporting the secondary market, increasing incentives for bio-investments, promoting the globalization of domestic VCs, and strengthening the public accelerator role of CCEI. These suggestions will be reviewed and incorporated into the 2025 FoF investment plan and future policies.

Minister Oh Young-joo emphasized, “Despite economic challenges such as rising uncertainties and sluggish domestic recovery, investments in innovative ventures and startups—the drivers of future growth—must continue without interruption. MSS will issue an early call for proposals for the $770 million (KRW 1 trillion) FoF investment project in January to ensure prompt capital supply to the venture investment market. Additionally, we will recognize secondary share acquisitions as a primary investment purpose over the next two years to foster a virtuous cycle of ‘investment → recovery → reinvestment.’”