Cumulative Venture Investment in August Hits 4.6 Trillion Won, a Record High... 92 Companies Raised Over 10 Billion Won

Ministry of SMEs and Startups 'Venture Investment and Fund Formation Trends'
ICT, Bio·Medical Sectors Surpass 1 Trillion Won Accumulated in August

Photo by Asia Economy DB

[Asia Economy Reporter Kim Heeyoon] Domestic venture investment recorded 4.6158 trillion KRW, surpassing last year's 4.3045 trillion KRW, setting a new all-time high.

According to the 'Venture Investment and Fund Formation Trends' announced by the Ministry of SMEs and Startups on the 28th, venture investment until the end of August this year reached 4.6158 trillion KRW, exceeding last year's record high of 4.3045 trillion KRW. Venture fund formation was recorded at 3.9472 trillion KRW.

This is the result of over 1.4 trillion KRW invested during July and August after surpassing 3 trillion KRW in venture investment in the first half of this year, with an average monthly investment of 577 billion KRW until August.

The cumulative number of investment cases and invested companies until August also recorded the highest ever with 3,395 cases and 1,588 companies respectively, compared to the same period last year. The average investment amount per case was 1.36 billion KRW, and the average investment amount per company was 2.91 billion KRW.

By industry, investments were concentrated in Information and Communication Technology (ICT) services, bio-medical, and distribution/service sectors. In particular, investments in ICT services and bio-medical sectors surpassed 1 trillion KRW. The increase in investments in these three sectors accounted for about 76% (1.6113 trillion KRW) of the total increase in venture investment (2.1312 trillion KRW).

Among the top three sectors, investments in ICT services and distribution/service sectors more than doubled compared to the cumulative amount as of August last year. Additionally, investments in gaming also showed significant growth.

Venture investment in non-face-to-face sector companies until August recorded 2.3084 trillion KRW, nearly double (+97.8%, +1.1416 trillion KRW) compared to 1.1668 trillion KRW as of August last year. The number of invested companies increased by nearly 30% (+175 companies) from 586 companies as of August last year to 761 companies.

Cumulative Venture Investment Performance in August Over the Past 5 Years (Unit: 100 Million KRW). Photo by Ministry of SMEs and Startups

Venture investments in mid-to-late stage companies more than doubled compared to the same period last year. Mid-stage companies increased their share by 8.3 percentage points compared to last year, maintaining the largest proportion as in the previous year. Although investment amounts in early-stage companies increased by 204.1 billion KRW (+25.2%) compared to the cumulative amount as of August last year, the investment share decreased by about 10.6 percentage points due to larger increases in investments in mid-to-late stage companies.

The proportion of follow-up investments has steadily increased over the past five years. The cumulative follow-up investment performance until August this year was 3.3573 trillion KRW, with the cumulative follow-up investment ratio in August steadily rising from about 55% in 2017 to the highest level of approximately 72.7% this year.

Among companies that received cumulative venture investments until August, those that attracted investments of 10 billion KRW or more numbered 92, 17 more than 75 companies at the end of last year. In particular, 10 companies out of the 92 attracted investments of 30 billion KRW or more.

The cumulative venture fund formation performance is also notable. It recorded 3.9472 trillion KRW, an increase of about 1 trillion KRW compared to the cumulative amount as of August last year. This is about 60% of last year's record high venture fund formation performance at the end of the year (6.5676 trillion KRW). Considering the usual trend and additional fund formations, the Ministry of SMEs and Startups predicts that annual fund formation will surpass last year's performance by December this year.

The cumulative venture fund formation investors' status until August shows that policy finance increased by about 1.9% (+19.6 billion KRW) compared to the same period last year to 1.077 trillion KRW, while the private sector increased by about 60% (+1.0634 trillion KRW) to 2.8702 trillion KRW, which is 2.7 times more than policy finance. Among private investors, general corporations invested the most in venture fund formation, contributing 727.9 billion KRW, more than 300 billion KRW compared to the cumulative amount as of the same period last year.

Park Yongsun, Venture Innovation Policy Officer at the Ministry of SMEs and Startups, stated, "The fact that venture investment this year reached last year's record high four months ahead of schedule is believed to be due to the overall quantitative and qualitative growth of the startup venture ecosystem." He added, "The Ministry of SMEs and Startups will faithfully implement various startup and venture-related measures announced this year to help Korea become a global venture powerhouse."

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