Ministry of SMEs and Startups Selects 40 Sub-Funds for Second Mother Fund Investment... 746.8 Billion KRW Raised

Combined 1st and 2nd Rounds Create 2.5 Trillion Won Motefund, Continuing Venture Investment Passion
Smart Daehanminguk Fund 126.9 Billion Won, M&A and Women Enterprise Funds Total 313.4 Billion Won Selected

Minister Kwon Chil-seung of the Ministry of SMEs and Startups is giving a briefing in the briefing room of the Government Seoul Office Annex.
[Photo by Asia Economy DB]

[Asia Economy Reporter Kim Jong-hwa] Through the second round of the Mother Fund investment project, 40 sub-funds have been finally selected. The Mother Fund will invest 374.6 billion KRW, and approximately 370 billion KRW of private investment funds will be matched, creating a total fund of 746.8 billion KRW.

With this, a total of 2.5 trillion KRW venture funds will be established, including 1.7132 trillion KRW raised through the first round of the Mother Fund investment project and 746.8 billion KRW raised through this second round. Just as the Mother Fund supplied seed money to the venture investment market despite the COVID-19 situation last year, the venture investment boom is expected to continue this year as well.

Six ministries, including the Ministry of SMEs and Startups, Ministry of Culture, Sports and Tourism, Ministry of Science and ICT, Ministry of Environment, Ministry of Land, Infrastructure and Transport, and Ministry of Education, announced on the 23rd that they have completed the selection of sub-funds for the 2021 Mother Fund second round investment project.

A total of 147 funds applied for this second round, and after review, 40 funds were finally selected. The Mother Fund will invest a total of 374.6 billion KRW in the 40 selected funds, and approximately 370 billion KRW of private investment funds will be matched, creating a total fund of 746.8 billion KRW.

Despite COVID-19 last year, the Mother Fund supplied seed money to the venture investment market, attracting private capital into the venture investment market. As a result, both venture investment and venture fund formation achieved record highs. This year, both investment and fund formation exceeded 1 trillion KRW in the first quarter, continuing the record-breaking performance.

The funds finally selected through this second round will be invested in growth-stage companies from early startups to mergers and acquisitions (M&A), as well as in sectors such as the Korean New Deal, cultural content, science and technology, future environmental industries, smart transportation, and university startups.

1.269 Trillion KRW Selected for 'Smart Korea Fund' Investing in Korean New Deal Projects

The 'Smart Korea Fund,' a symbol of the Korean New Deal, aims for a total of 6 trillion KRW from 2020 to 2025. Last year, it was additionally raised to 1.6 trillion KRW, far exceeding the original target of 1 trillion KRW.

About 900 billion KRW is being raised through the first regular round of the Mother Fund, and an additional 126.9 billion KRW fund was selected in this second regular round, making it expected that a total of 1 trillion KRW fund will be raised this year.

With 1.6 trillion KRW raised last year and 1 trillion KRW selected this year, a total of 2.6 trillion KRW will be invested to enable innovative startups and venture companies to create jobs and secure global market leadership in non-face-to-face, bio, and green new deal sectors.

313.4 Billion KRW for Sector-Specific Funds Including M&A, Early Startups, and Women-Owned Businesses

To promote a smooth virtuous cycle ecosystem of investment, recovery, and reinvestment, an M&A fund worth 100 billion KRW was selected for corporate mergers and acquisitions. Additionally, a 34.1 billion KRW 'R&D Matching Fund' will be created, which matches government R&D funds 1:1 with private venture capital investments.

Also, a 134.5 billion KRW 'Early Startup Fund' focusing on companies within three years of establishment, a 20 billion KRW 'Women-Owned Business Fund' to promote women’s entrepreneurship and support women-owned businesses, an 8 billion KRW 'Technology Holding Fund' to promote commercialization of technologies held by technology holding companies, and a 16.7 billion KRW 'Social Impact Fund' investing in social venture companies pursuing both financial performance and social value were selected.

306.5 Billion KRW for Ministry-Specific Funds Including Cultural Content, Science and Technology, and Smart Transportation

The Ministry of Culture, Sports and Tourism selected a 26.2 billion KRW fund to support the recovery of content companies struggling due to COVID-19 and a 58.6 billion KRW fund investing in Korean films. The Ministry of Science and ICT selected a 40 billion KRW investment fund for virtual convergence (XR) industries such as immersive content, a 20 billion KRW fund for public technology commercialization companies, and a 19 billion KRW fund investing in innovation companies in research and development special zones.

The Ministry of Environment selected a 56.5 billion KRW 'Future Environmental Industry Fund' investing in eco-friendly vehicles, recycling industries, and small and medium environmental ventures, aiming to promote private green investment in the long term. The Ministry of Land, Infrastructure and Transport is creating a 17.6 billion KRW fund investing in the land and transportation industry, including transportation and logistics. Notably, a new smart digital convergence sector including drones, smart logistics, and autonomous vehicles was established with a 50 billion KRW fund.

The Ministry of Education selected six 'University Startup Funds' totaling 18.6 billion KRW, focusing on investments in university startups by the government and universities (three new and four regional funds). This year, funds that attracted high private capital or regional asset management companies were preferentially selected. The six selected management companies are expected to play a catalytic role in revitalizing university-originated startups by promoting investment in university startups (students, faculty, etc.), the main drivers of innovative growth.

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