Korea Venture Investment and Kibo Join Forces to Invest in Technology-Based Early Startups

[Asia Economy Reporter Kim Bo-kyung] Korea Venture Investment Corp. and Korea Technology Finance Corporation have joined forces to invest in early-stage startups based on outstanding technology.

Korea Venture Investment Corp. signed a "Mutual Cooperation Agreement for Technology Guarantee-Venture Investment Combined Financial Support" with Korea Technology Finance Corporation on the 4th at the Korea Venture Investment meeting room in Seocho-gu, Seoul.

Under this agreement, Korea Venture Investment Corp. will receive recommendations of excellent technology companies without prior institutional investment history from Kibo and invest through the "Technology Enterprise First Step Fund" using a conditional equity acquisition contract (SAFE) method.

SAFE is a method where investors initially invest, and when follow-up investments occur later, the investor's equity ratio is determined based on the company valuation decided at that time. It is mainly used for investing in early-stage startups where company valuation is difficult.

Kibo will receive information on companies with cumulative investments of 300 million KRW or less among those invested by the mother fund investment fund or companies located in provincial areas from Korea Venture Investment Corp. and provide support such as direct investment and linked guarantees. The mother fund investment fund refers to sub-funds invested by the mother fund managed by Korea Venture Investment Corp.

Earlier, in December last year, Korea Venture Investment Corp. selected two fund managers (accelerators), SparkLabs and Kingsley Ventures, to jointly operate the Technology Enterprise First Step Fund with Korea Venture Investment Corp. They plan to complete the formation of two funds totaling 31.35 billion KRW by this month.

The Technology Enterprise First Step Fund is a fund jointly operated by Korea Venture Investment Corp. and accelerators to activate SAFE investment, which is still unfamiliar in Korea. The activation of SAFE investment is expected to help early-stage startups, where company valuation is difficult, to raise funds.

Meanwhile, this agreement was prepared to establish a linkage system for technology guarantee-venture investment support as part of the promotion tasks of the "Technology-based Venture and Startup Combined Financial Support Plan" discussed at the 26th Emergency Economic Central Countermeasures Headquarters meeting and the 9th Korean New Deal Ministerial Meeting held in January last year.

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