Today's Enchem Made Possible by 'Growth-Sharing Fund'

Support for Promising SMEs and Ventures Since 2008
Attracting Over 1 Trillion Won in Private Follow-up Investment
Successful IPOs of More Than 30 Companies Achieved

On the 1st, at the Korea Exchange in Yeouido, Seoul, attendees including Oh Jeong-gang, CEO of Enchem (center), are taking a commemorative photo at the abbreviated listing ceremony.

#. Enchem, a secondary battery electrolyte manufacturer located in Jecheon, Chungcheongbuk-do, successfully went public on the KOSDAQ market on the 1st. The company, which was also selected as one of the ‘Top 100 Small Giants in Materials, Parts, and Equipment’ by the Ministry of SMEs and Startups, recorded sales of 137.1 billion KRW last year. This represents a 68-fold growth compared to 2013, its second year after founding. Sales are expected to increase to 242.1 billion KRW this year. The growth of Enchem into the number one domestic and sixth largest global company in the secondary battery electrolyte industry was supported by the Growth Sharing Fund from the Small and Medium Business Corporation (SBC).

Among SBC’s policy fund loans, the ‘Investment-Loan Hybrid Finance (Growth Sharing Fund)’ has shown remarkable results in supporting innovative growth and scale-up of promising small and medium ventures. Companies receiving this fund have continued to attract private follow-up investments and proceed with initial public offerings (IPOs).

According to SBC on the 16th, from 2008 until last September, a total of 668.5 billion KRW in Growth Sharing Funds was provided to 787 companies. The follow-up investment attracted by these companies reached a total of 1.0025 trillion KRW by last year, and 30 companies successfully went public. The Growth Sharing Fund has served as a catalyst for attracting follow-up investments for small and medium ventures.

The Growth Sharing Fund is a representative investment-loan hybrid finance program that supports companies with high IPO potential through convertible bonds (CBs), redeemable convertible preferred stocks (RCPS), and other methods. Notably, this fund plays a bridging role for non-metropolitan companies, which are relatively underserved by private investments. Among supported companies, 47% are non-metropolitan. Compared to last year’s private venture capital investments where metropolitan companies accounted for 72% and non-metropolitan companies only 28%, this fund plays a prominent role in supporting the scale-up of promising non-metropolitan companies.

Enchem, which recently went public, is a prime example of successful support for a non-metropolitan company. In its second year after founding in 2013, Enchem received 1.1 billion KRW in Growth Sharing loans, which were used for raw and subsidiary material costs, purchasing analytical equipment, and other technology development and commercialization activities. This enabled Enchem to start mass supply to major secondary battery makers such as LG Chem, SK Innovation, and CATL. Its initial annual production capacity of 5,000 tons grew to 65,000 tons through expansions of its Cheonan, Poland, and China plants. Furthermore, through continuous investment, production capacity is planned to increase to 125,000 tons annually by next year. CEO Oh Jeonggang of Enchem stated, "Many startups with promising technology business potential have faced difficulties in funding due to small scale and lack of collateral, often leading to business abandonment. With policy funds that focus on future growth potential, successful commercialization and follow-up investment attraction enabled corporate growth."

This year, the Growth Sharing Fund support scale is about 70 billion KRW. From this year, the investment targets have been diversified to include seed investments for graduates of the Youth Startup Academy and companies in local regulatory free zones. The fund has also begun direct preferred stock investments in earnest, enhancing the financial structure and corporate value of small and medium ventures. Kim Hakdo, SBC Chairman, said, "Although venture investment capital has been continuously increasing recently, concentration phenomena are intensifying. As a policy financial institution, we will explore various support policies to grow excellent small and medium ventures, which are in investment blind spots, into unicorns."

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