The Ministry of SMEs and Startups announced on the 23rd that it has completed the selection of venture funds for the '2025 First Official Investment of the Fund of Funds' project.
This investment project will invest 374.7 billion won to select 34 funds, amounting to a scale of 753.8 billion won in venture funds. The selected funds are expected to be established within three months, with most concluding in July. They will begin active investment from the second half of the year.
First, a dedicated 'Rookie League' for emerging and small venture capital was selected with 10 funds totaling 177.1 billion won. This year, 100 billion won, which is 10% of the 1 trillion won fund allocation budget of the Ministry of SMEs and Startups, has been allocated.
The 'Early-stage' sector was selected as the second largest at 169.9 billion won following the Rookie League. In particular, this year, the 'Early-stage small' sector, which invests in early-stage corporations through small funds of around 5 billion won, will also be established. Startup planners, creative economy innovation centers, and university technology holding companies, which have strengths in discovering and nurturing early-stage corporations, have been selected.
A 'Bio Fund' was selected with a scale of 50 billion won, which is expected to contribute to financing early-stage biotech corporations facing difficulties in attracting investment at the preclinical stage. The 'Lycon Fund' was also selected with a scale of 17.1 billion won to support entrepreneurial small business owners so they can grow in the cultural and lifestyle sectors.
Additionally, a 'Mergers and Acquisitions (M&A) Fund' to support corporate succession among small businesses and a 'Scale-up and Mid-sized Leap Fund' to support investment attraction for ventures and startups were selected with a scale of 100 billion won. The 'Youth Startup Fund' of 66.8 billion won, the 'Women Corporations Fund' of 20 billion won, and the 'Re-launch Fund' of 52.9 billion won were also selected to provide support in areas requiring policy-driven nurturing.
This investment project aims to improve the system to ensure that venture capital consistently fulfills its role of risk investment.
To expand investment outside of the metropolitan area and in early-stage investments, local and early investment incentives have been strengthened. In this regard, even funds that are not exclusively for local and early startups are expected to invest more than 86.2 billion won in local corporations and over 52.3 billion won in newly established startups.
Furthermore, to promote a virtuous cycle structure of recovery and reinvestment in investment, the purchase of existing shares will be recognized as a primary investment for up to 20% for a maximum of two years starting this year. Investment amounts from outside the metropolitan area will recognize primary investments at 120%.
The guidelines for damage and loss payments, which serve as the basis for management fees, have been reorganized to be market-friendly so that they can support challenging investments such as early investments. Corporations that are within five years of establishment, where generating revenue is challenging, will not have their management fees reduced, even if their financial statements deteriorate after the investment. Other corporations may also have the reduction of management fees suspended, provided that management improvements are anticipated, subject to the review of auditors.
Oh Youngju, Minister of the Ministry of SMEs and Startups, noted, "Last year, the scale of venture investment in South Korea successfully rebounded for the first time after a declining trend since 2021, continuing to grow steadily even in challenging global market conditions," and added, "If the 700 billion won venture funds selected in this investment project are quickly established and commence substantial investment in the second half, I expect this recovery trend to be supported."