Ministry of SMEs and Startups to Continue 'Venture Boom' by Raising Over 200 Billion KRW in Global Funds

700 Billion KRW Investment, 1.8 Times the Mother Fund Contribution, in 343 Domestic Startups and Ventures

[Asia Economy Reporter Kim Jong-hwa] The Ministry of SMEs and Startups will establish a global fund exceeding 200 billion KRW to support major companies such as Kurly and Zigbang in attracting overseas investment and expanding abroad.

On the 10th, the Ministry announced that it will invest 75 billion KRW through the 2021 overseas venture capital (VC) global fund investment announcement.

Since 2013, the Ministry has been creating global funds operated by foreign venture capital firms with investments from the Korea Fund of Funds to support domestic SMEs and venture companies in attracting overseas investment and expanding abroad. Currently, 33 global funds worth 3.3641 trillion KRW are in operation.

The Korea Fund of Funds has invested 377.6 billion KRW in global funds so far and attracted a total of 2.5013 trillion KRW in pure foreign capital out of 3.3641 trillion KRW. These funds are distributed worldwide, including 20 in the United States, 3 in China, 7 in Southeast Asia, 2 in Europe, and 1 in Latin America.

Notably, last year, in collaboration with the international organization Asian Development Bank (ADB), a 66 billion KRW 'Asian Development Bank (ADB) Venture Fund' was established.

So far, 343 domestic ventures and startups have received 700 billion KRW in investments from global funds, which is 1.8 times the Korea Fund of Funds' investment amount (377.6 billion KRW). These companies have been able to attract follow-up investments based on overseas networks built through global funds, rather than one-time investments.

Representative companies include Viva Republica, Kurly, Zigbang, and Masspresso. After receiving investments from global funds, these companies attracted large-scale investments from renowned overseas venture capitals and corporations such as Sequoia Capital and Goldman Sachs.

Global funds contribute to invested companies not only through investments but also in overall business management aspects, from supply contracts and business partnerships to mergers and acquisitions (M&A).

Hyperconnect, a domestic startup operating the global video messenger app 'Azar,' successfully completed an M&A with Nasdaq-listed Match Group last month. The growth and M&A process of Hyperconnect were supported by investments and assistance from global funds.

Some companies overcame the COVID-19 crisis through connections made with overseas investors via global funds. Eventus, a startup operating an offline event reservation and management platform, faced difficulties in management due to COVID-19 last year.

Eventus formed a business partnership with Plink, a startup developing real-time communication software, introduced by an overseas investor, and shifted its business model to target online events. As a result, the company's sales increased compared to before COVID-19, achieving remarkable success.

Proposals for this announcement can be submitted via email (sangheeyu@kvic.or.kr) from 10 a.m. on the 11th until 2 p.m. on the 12th of next month, for one month. After preliminary review (document screening and on-site inspection) and final review (operator proposal presentation), the operator will be selected in June. Operators proposing higher investment amounts in domestic companies will be given preference during the selection process.

Yang Seung-wook, head of the Venture Investment Division at the Ministry of SMEs and Startups, said, "We hope that our companies, which are struggling to attract overseas investment due to COVID-19, will receive substantial investments through this overseas venture capital global fund and grow into global unicorn companies." He added, "This year, we will do our best to continue the second venture boom by providing comprehensive support such as hosting the K-Unicorn online investor relations (IR) event."

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