Jungjingong Gwangju Headquarters Provides 60 Billion Won in Growth-Sharing Funds to Foster Innovative Companies

[Asia Economy Honam Reporting Headquarters Reporter Park Jin-hyung] The Gwangju Regional Headquarters of the Small and Medium Business Corporation announced on the 22nd that it will provide 60 billion KRW in growth-sharing funds to promising small and medium venture companies with high growth potential.

Growth-sharing funds are the only combined investment and financing project by the Small and Medium Business Corporation that supports companies with high IPO potential by directly acquiring convertible bonds (CB) and redeemable convertible preferred stocks (RCPS).

Applicants must be small and medium venture companies with excellent technological and business feasibility, innovation, and growth potential, and that have not received investment from private venture capital companies.

However, even if private venture capital companies have invested, small and medium venture companies less than 7 years old and located outside the Seoul metropolitan area are eligible to apply.

The issuance conditions for convertible bonds are a loan period within 5 years (including a grace period of 2 years), and for companies less than 7 years old, 7 years (including a grace period of 4 years). The nominal interest rate is 0.5%, the maturity guaranteed interest rate is 3%, and the support limit is up to 6 billion KRW (7 billion KRW for companies located in provincial areas).

In particular, startup companies less than 3 years old have a reduced nominal interest rate of 0.25%, and the corporate valuation is omitted at the time of convertible bond acquisition and designed to be linked to the evaluation value of follow-up investments by institutional investors later, enabling rapid support.

Last year, the Small and Medium Business Corporation supported 70 billion KRW for innovative growth companies and non-face-to-face industry sectors.

The amount of follow-up investment attracted by companies supported by growth-sharing funds was 217.8 billion KRW in 2021, and the cumulative total from 2008 to last year reached 1.2 trillion KRW, demonstrating its role as a catalyst for attracting follow-up investments.

The Small and Medium Business Corporation is faithfully fulfilling the role of policy finance by actively supporting growth-sharing funds in areas neglected by the private investment market, such as companies located in provincial areas or those engaged in traditional industries.

Park Hong-joo, head of the Gwangju Regional Headquarters, said, “This year, we plan to expand and regularly hold briefings to attract private follow-up investments for companies supported by growth-sharing funds,” adding, “We will also strengthen support for carbon neutrality of small and medium venture companies through direct financing to promising companies in low-carbon and eco-friendly sectors.”

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