Korea Venture Investment Expands Healthcare Account Investment Sector to 'Biohealth'

Korea Venture Investment has rolled up its sleeves to respond to the shrinking investment sentiment in bio companies.

On the 1st, Korea Venture Investment announced that it will conduct the August ad-hoc contribution project for the Korea Fund of Funds (K-FoF) in collaboration with the Ministry of Health and Welfare. It plans to contribute a total of 35 billion KRW to create a venture fund worth 150 billion KRW.

This contribution project is characterized by actively reflecting the opinions of the venture capital (VC) industry, such as the ‘K-Bio Vaccine Fund Formation Strategy Advisory Meeting’ held last July.

Specifically, the key features include ▲expansion of the main investment sectors ▲allowance of priority closing ▲provision of priority loss coverage ▲permission to form venture investment associations and new technology business investment associations ▲joint contributions with other policy institutions.

First, regarding the main investment sectors, the scope has been expanded to cover the entire biohealth field. This allows for broader investments including pharmaceuticals, medical devices, and digital therapeutics.

The burden on fund managers for fund formation has also been reduced. Priority closing is allowed at 70% of the target amount. When priority closing occurs, the K-FoF budget is fully (100%) committed. This also reduces the risk of fund formation failure for investors who commit through subsequent additional closings.

The financial risk for private investors has been lowered as well. The K-FoF provides priority loss coverage to external investors within 10% (15 billion KRW) of the fund formation target amount. Additionally, the formation of venture investment associations and new technology business investment associations is permitted.

The joint contribution with other policy institutions is also noteworthy. Upon final selection, a structure has been created to secure an additional 25 billion KRW from the Korea Development Bank and the Industrial Bank of Korea alongside the 35 billion KRW K-FoF budget. This supports 40% of the fund formation target amount.

Proposals can be submitted through the Venture Investment Comprehensive Information System from 10:00 AM to 2:00 PM on September 11. The final fund managers will be selected in October through a two-stage review process including document screening and on-site inspection in the first stage, and fund manager proposal presentations in the second stage. More detailed information can be found on the Korea Venture Investment website.

Yu Woong-hwan, CEO of Korea Venture Investment, emphasized, "In the midst of shrinking investment sentiment, the Ministry of Health and Welfare and policy financial institutions will work together to establish a foundation that allows small and venture companies in the biohealth sector to receive timely and sufficient investment to grow.”

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