Ministry of SMEs and Startups and 3 Other Ministries Select 28 Sub-Funds for Mother Fund

Park Young-sun, Minister of SMEs and Startups. Photo by Yonhap News

[Asia Economy Reporter Moon Hyewon] The Ministry of SMEs and Startups, the Ministry of Health and Welfare, the Ministry of Land, Infrastructure and Transport, and the Korean Intellectual Property Office announced on the 5th that they have completed the selection of the 3rd regular and ad-hoc investment projects of the 2020 Korea Fund of Funds through Korea Venture Investment.

A total of 74 funds applied, and after review, 28 funds were finally selected. The Fund of Funds will invest a total of 371.7 billion KRW in the 28 selected funds, and by the end of the year, about 400 billion KRW of private investment funds will be matched, creating a total scale of 769.3 billion KRW.

The funds will supply investment capital to sectors such as non-face-to-face, bio, green new deal, shared housing, and patent commercialization as soon as the fund formation is completed within the year.

The “Smart Korea Fund,” a symbolic fund of the Korean New Deal and aimed at digital economic transformation, has mostly completed raising 1 trillion KRW.

Through this fund selection, a total of 19 funds amounting to 582.1 billion KRW were selected, including 341.6 billion KRW for non-face-to-face funds, 145 billion KRW for bio funds, and 95.5 billion KRW for green new deal funds. Considering the 580 billion KRW scale Smart Korea Fund that has been raised since the first half of the year, this far exceeds the annual target of 1 trillion KRW.

When an additional 67 billion KRW scale fund is selected through this month’s ad-hoc project, the Smart Korea Fund is expected to finish with a total scale of 1.2 trillion KRW, exceeding the annual target by 200 billion KRW.

The Smart Korea Fund includes large corporations, unicorns, and other mentor companies participating as sponsors to support the growth of junior companies by investing in the fund. These mentor companies are expected to create synergy by supporting the growth of promising startups and venture companies using their experience and infrastructure.

For the creation of new regional industries, regulatory free zone funds will be raised in cooperation with local governments in Daejeon, Gyeongnam, and Gangwon, forming three funds totaling 35.2 billion KRW. To create funds suited to regional characteristics, innovation entities such as the Creative Economy Innovation Centers and asset management companies headquartered in the provinces were selected as the core.

In response to demographic changes such as the increase in single-person households, two shared housing funds totaling 25 billion KRW will be raised to revitalize the private shared housing market. These funds will invest in startups, ventures, and social enterprises that supply and operate shared housing or provide shared services related to shared housing (such as laundry services and shared parking lots).

To activate intellectual property financial investment, one IP direct investment fund focusing on IP monetization projects worth 20 billion KRW and one patent technology commercialization fund investing in companies commercializing patented technologies worth 35 billion KRW will be raised.

Additionally, two material, parts, and equipment funds totaling 72 billion KRW will be raised to foster material, parts, and equipment companies.

Kim Jusik, head of the Venture Investment Division at the Ministry of SMEs and Startups, said, “We expect that this Fund of Funds investment project, including the Smart Korea Fund, will contribute to transforming our economy into a digital economy,” adding, “We will promptly complete the fund formation to invigorate not only our startup and venture ecosystem but also the entire economy.”

This content was produced with the assistance of AI translation services.