Government's 9 Ministries Invest 500.2 Billion Won in MoTae Fund... 900 Billion Won Venture Fund Created

[Asia Economy Reporter Kim Bo-kyung] The Ministry of SMEs and Startups and Korea Venture Investment Corp. announced on the 23rd that they will invest 500.2 billion KRW through the 2nd regular call for investment of the 2021 Mother Fund.

The government’s Mother Fund plans to supply seed money to the venture investment market and raise private funds to create a total venture fund worth 900 billion KRW.

First, the 'Smart Korea Fund,' symbolizing the Korean New Deal, will invest 50 billion KRW in the 2nd regular investment project of the Mother Fund to create a fund of 125 billion KRW.

The 'Regional New Deal Venture Fund' for regional balance plans to establish mother funds for four regions using 40 billion KRW from the 1st round and 20 billion KRW from the 2nd round. Public institutions located in the regions will invest to form mother funds, which will then be used to create sub-funds with private participation to invest in regional innovative companies and companies within regulatory free zones.

Additionally, a merger and acquisition (M&A) fund will be created with 40 billion KRW invested to form a fund worth 100 billion KRW.

Using 30 billion KRW from the Mother Fund, a large-scale 'Overseas Venture Capital (VC) Global Fund' will be established to encourage excellent overseas venture capitals to invest in domestic companies.

Through global funds, notable domestic startups such as Woowa Brothers, Kurly, and Zigbang have previously succeeded in attracting follow-up investments.

The 'Early Startup Fund,' focusing on companies within three years of establishment, will invest 100 billion KRW to create a fund of 146.6 billion KRW, and a 'Technology Development (R&D) Matching Fund,' which matches government R&D funds one-to-one with private venture capital investments, will raise 33.5 billion KRW.

In addition, funds will be created for ▲women-owned businesses (12 billion KRW invested → 20 billion KRW created) ▲technology holding companies (10 billion KRW invested → 16.7 billion KRW created) ▲social impact (10 billion KRW invested → 16.7 billion KRW created).

The 2nd regular investment of the Mother Fund involves not only the Ministry of SMEs and Startups but also nine ministries including the Ministry of Culture, Sports and Tourism and the Korean Intellectual Property Office, each investing in their respective fields.

The Korean Intellectual Property Office will establish a patent technology commercialization fund worth 125 billion KRW and a crowdfunding support fund for IP-based startups worth 15 billion KRW.

The Ministry of Culture, Sports and Tourism will create approximately 90 billion KRW in funds, including a 56 billion KRW fund investing in Korean films and a 33.3 billion KRW fund investing in related cultural industries and investment promotion district development projects for the creation of an Asian cultural hub city.

The Ministry of Science and ICT will establish a 79 billion KRW fund investing in virtual convergence (XR) industries such as immersive content, public technology commercialization companies, and innovation companies in research and development special zones.

The Ministry of Environment will create a 43 billion KRW Future Environmental Industry Fund investing in eco-friendly vehicles, upcycling industries, and small and venture environmental companies, promoting long-term private green investment activation.

The Ministry of Land, Infrastructure and Transport will establish a 34 billion KRW fund investing in urban, housing, transportation, and logistics industries, newly adding smart digital convergence fields such as drones, smart logistics, and autonomous vehicles. The Ministry of Education will create a university startup fund of at least 16 billion KRW focusing on early university startups with government and university participation.

The Ministry of Employment and Labor will create a 12 billion KRW fund investing in social economy enterprises (with 9 billion KRW government investment) and plans to operate it to invest in companies that create youth employment, considering the recent severe youth employment situation. This fund newly introduces additional incentives for fund managers if they achieve youth (ages 15-39) employment creation targets.

The Ministry of Oceans and Fisheries will establish a 14.3 billion KRW Marine New Industry Fund investing in core fields such as marine bio and marine tourism, as well as marine industries converging advanced technologies like artificial intelligence (AI), Internet of Things (IoT), and big data.

To expedite investment execution, additional points will be awarded during fund manager selection if a certain scale of investment commitment is made in the formation year.

Proposals for this announcement will be accepted online from 10 a.m. on the 24th until 2 p.m. on the 31st of next month. After the first review (document screening and on-site inspection) and the second review (fund manager proposal presentation), the final fund managers will be selected in May.

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