This article was displayed on the ChosunBiz MoneyMove site on June 13, 2025, at 2:29 p.m.
Venture capital (VC) Kakao Ventures is pushing to expand the scale of its 11th venture fund. Although it was already formed and registered last March, it has decided on a multi-closing policy. It plans to increase the amount with nearly 20% of mandatory investments from the management's performance.
On the 13th, according to the VC industry, Kakao Ventures has set a policy to increase the formation amount of its 11th fund, dubbed the "Startup Korea Kakao Copilot Fund," which it established last March, and has begun serious recruitment of additional investors. The multi-closing timing is set for the second half of this year at the latest.
Multi-closing refers to the process of initially forming a fund by raising capital and then reconstituting it with additional funds under similar conditions. Kakao Ventures has decided to adjust the scale of the 11th fund to around 50 billion won, up from the previous 40 billion won.
The market previously perceived that Kakao Ventures had shelved the multi-closing of its 11th fund. This was reportedly because it had initiated capital deployment after completing its first VC investment project with the Korea Federation of Credit Cooperatives in April. At that time, the firm was on the shortlist but ultimately did not succeed.
Amid this, inquiries from some institutional investors about fund investments were said to have influenced the push for multi-closing. The news of Kakao Ventures' failure to win the credit cooperative's investment project became an opportunity to inform others that it was recruiting external investors.
Among institutional investors, Kakao Ventures has been classified as a house that cannot invest. This classification follows Kakao's liquidation of its first fund, which was set up with 11.5 billion won, worth over 1 trillion won. The plan was to fully enjoy the investment returns at the group level.
In fact, Kakao Ventures has not received external investments since concluding its 8th fund, the "Kakao Growth Hacking Fund," formed in December 2020. The equity stakes of Kakao Ventures in the 9th and 10th funds formed in 2021 and 2023, respectively, were shown to exceed 60% each.
The 11th fund has been set up with a focus on private investment, with the Startup Korea Fund, a master fund led by large, small, and medium-sized enterprises, acting as an anchor investor, but the industry sees this as internal investment. This was due to Kakao Mobility being listed as a private investor.
Given the good performance of past fund management, Kakao Ventures expects that recruiting additional funds for the 11th fund will proceed smoothly. It has already achieved significant investment success with firms like Dunamu and SHIFT UP, and its initial fund investors, Barunson and Danal Entertainment, have seen profits exceeding 100 times.
The size of the investment from management, known as GP commit, is also considered an advantage. Kakao Ventures, which received 6 billion won in investments from the Startup Korea Fund, has contributed 9 billion won as management's mandatory investment for the 11th fund. The GP commit ratio for the 11th fund, sized at 40 billion won, exceeds 20%.
In the past, the GP commit ratio was typically 1%, but it has recently increased to around 3-5%. Amid a shrinking venture investment market, there is a growing demand for responsibility in investments, meaning that GPs also share investment losses in case of failure. Even if the 11th fund size becomes 50 billion won, the ratio will be 18%.
Kakao Ventures plans to increase its investments in areas of strategic focus, such as the top 10 fields of ultra-gap technology (including artificial intelligence, robotics, system semiconductors, and aerospace), as well as in ICT services, deep tech, digital healthcare, and gaming. The main fund manager will be CEO Kim Ki-jun.
Meanwhile, Kakao Ventures currently manages assets under management (AUM) of 430 billion won across 11 funds. With the multi-closing of the 11th fund, the AUM is expected to increase to 440 billion won. Kakao Ventures stated that it has left open the possibility of additional investments until the first half of the year in relation to the expansion of fund scale.