Mother Fund invests 900 billion KRW... Venture Funds raised over 1.6 trillion KRW

Motae Fund 2021 2nd Regular Investment

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[Asia Economy Reporter Kim Cheol-hyun] The Ministry of SMEs and Startups (Minister Kwon Chil-seung, hereinafter referred to as the Ministry) announced on the 21st that, together with the Ministry of Education, Ministry of Culture, Sports and Tourism, Ministry of Science and ICT, Ministry of Environment, Ministry of Land, Infrastructure and Transport, Ministry of Oceans and Fisheries, Korean Intellectual Property Office, and Korea Venture Investment Corp., it has issued the 'Mother Fund 2022 2nd Regular Investment Announcement' and plans to invest more than 900 billion KRW to create venture funds exceeding 1.6 trillion KRW.

The Ministry announced the first regular investment of the 2022 Mother Fund worth 430 billion KRW last December in funds such as the Smart Korea Fund, Youth Startup Fund, and Scale-up Fund to further strengthen the second venture boom and continue the growth of venture investment through venture fund formation. The selection evaluation is currently underway. To ensure continuous and swift formation of venture funds in the second half of the year, the '2nd Regular Investment Announcement' was made just two months after the first regular investment announcement.

The eight ministries, including the Ministry, will invest a total of 929.7 billion KRW aiming to create venture funds exceeding 1.6 trillion KRW. The Ministry plans to invest 652.8 billion KRW in a total of 14 sectors including early-stage startups, regional New Deal, LP share securitization, venture re-acceleration secondary, and support funds, to create venture funds exceeding 1 trillion KRW. Looking at the details, the 2nd regular investment project this year plans to create an 'Early-stage Startup Fund' worth 373.5 billion KRW. Among the early-stage startup fund sectors, a new 'Regional Angel Stepping Stone Fund' investing in early startups outside the metropolitan area will also be created with a scale of 40 billion KRW.

To revitalize the secondary market, a 'LP Share Securitization Fund' worth 125 billion KRW will be created to acquire investor shares of existing venture funds that have passed a certain formation period, and a 'Venture Re-acceleration Secondary Fund' worth 42.8 billion KRW will be created to acquire non-performing shares held by existing venture funds. Additionally, to realize ultra-wide area venture investment in non-metropolitan regions, 20 billion KRW will be additionally invested in the 'Regional New Deal Venture Fund' following the 40 billion KRW invested in the first round this year. The 'Global Fund' will also receive an additional 80 billion KRW investment following the 20 billion KRW first investment to support the global expansion and growth into global unicorn companies of domestic innovative SMEs and venture companies.

Efforts will also be made to create venture funds related to socially vulnerable investment sectors. A 'Support Fund' focusing on companies affected by COVID-19 or re-startups will be created with a scale of 100 billion KRW, and a 'Social Impact Fund' investing in social venture companies operating businesses related to the disabled or socially vulnerable groups will be created with 16.7 billion KRW. The newly created funds this year, the 'ESG Fund' and 'Advertising & Marketing Fund,' will be created with scales of 16.7 billion KRW and 25 billion KRW respectively.

Seven ministries including the Ministry of Culture, Sports and Tourism, Ministry of Science and ICT, and Korean Intellectual Property Office will jointly invest in the 2nd regular investment of the Mother Fund. The Ministry of Culture, Sports and Tourism plans to create cultural content and tourism-related funds worth 156.2 billion KRW by investing in funds related to the development of the Asia Culture Center City, cultural industry, investment promotion district development projects, funds investing in Korean films (with investment from the Korean Film Council's Film Development Fund), and funds supporting tourism company growth.

The Ministry of Science and ICT will newly create a 'Metaverse M&A Fund' worth 100 billion KRW investing in mergers and acquisitions of metaverse technology-based companies and create a 'Public Technology Commercialization Fund' worth 40 billion KRW investing in the commercialization of national R&D outcomes, forming a total of 140 billion KRW in new technology-related funds. The Korean Intellectual Property Office will create patent and intellectual property-related funds worth 140 billion KRW focusing on patent technology commercialization and intellectual property (IP) application projects. Additionally, the Ministry of Environment will create a dedicated fund of 38.4 billion KRW focusing on future environmental industry companies, the Ministry of Land, Infrastructure and Transport will create a dedicated fund of 34 billion KRW investing in companies such as autonomous vehicles and drones, the Ministry of Oceans and Fisheries will create a dedicated fund of 28.6 billion KRW for marine bio and marine tourism industries, and the Ministry of Education will create a university startup dedicated fund worth 13.3 billion KRW focusing on student and teacher startup companies to support the growth of university startups.

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