SMEs Ministry Invests 875 Billion Won in Mothership Fund, Establishes 1.8 Trillion Won Venture Funds

Focus on Nurturing AI and Deep Tech Unicorns
Mandatory 20% Investment in Regional Companies
Enhanced Incentives for Regional and Early-Stage Investments

The Ministry of SMEs and Startups has selected 60 venture funds totaling 1.8 trillion won through the first phase of this year’s scheduled investment program for the Mothership Fund.

On April 29, the Ministry announced that it will invest 875 billion won to select 60 funds, creating a total of 1.7548 trillion won in venture funds. The selected funds are expected to be established by July, on the condition that they are formed within three months. As these funds begin actively investing in the second half of the year, they are anticipated to contribute to the growth of venture investment.

2026 Motefund 1st Sector Selection Results. Ministry of SMEs and Startups

The “Next-Generation Unicorn Fostering Project” for nurturing AI·deep tech unicorns in the startup and scaling up sectors was selected at a scale of 824.4 billion won. The startup sector, which focuses on investing in promising startups founded by professionals, consists of 12 funds totaling 374.4 billion won. For the scale-up sector, which provides an average of more than 10 billion won in scale-up investment to companies in the AI·deep tech field, three funds totaling 450 billion won were selected.

The early-stage startup sector was selected at a scale of 356.2 billion won. In response to the recent contraction in early-stage investment, the amount of investment was increased, making this the second largest after the Next-Generation Unicorn Project. Among these, the exclusive “Rookie League” for new and small venture capital firms and startup planners consists of 10 funds totaling 168.4 billion won, while the “Early-Stage Small” sector totals 54.8 billion won. This will further strengthen the foundation for the domestic venture investment industry to maintain diversity and dynamism as it grows.

The “Restart Fund,” which supports second-chance entrepreneurs, was selected with 8 funds totaling 210.8 billion won. Taking into account the unique characteristics of startups that can easily pivot, the investment scope has been expanded this year to include project-based business model pivoting companies.

Funds to revitalize the exit market will also be expanded. Three secondary funds totaling 140 billion won were selected to acquire existing shares of portfolio companies or limited partner (LP) interests in venture funds. The M&A fund, which supports business succession for small and medium-sized enterprises, was selected again this year at a scale of 100 billion won. These efforts are intended to support a virtuous cycle of investment, exit, and reinvestment in the venture market.

In addition, 70 billion won was allocated for the youth entrepreneurship fund, 16.7 billion won for the women’s business fund, and 36.7 billion won for the impact fund, ensuring a steady supply of capital to areas in need of policy-driven support.

The Ministry of SMEs and Startups has improved policies to enable venture capital firms to focus on risk-taking investment. To boost venture investment outside the Seoul metropolitan area, the Ministry has made it mandatory for its general Mothership sub-funds to invest at least 20% in non-metropolitan regions. Management companies that actively invest in non-metropolitan and early-stage startups are given priority in selection, thereby strengthening incentives for regional and early-stage investment. More than 80% of the funds selected this time are subject to additional regional investment requirements, and the proportion of management companies based outside the metropolitan area has increased compared to last year.

The Ministry will also increase the performance fee payment rate for fund managers based on their achievements in regional and early-stage investment. To encourage long-term investment, priority will be given to early-stage startup funds that propose a fund lifespan of more than 10 years. Seventy percent of the incentive-eligible funds are long-term funds.

To create a virtuous cycle of “investment → exit → reinvestment,” up to 20% of investments in existing shares will be temporarily recognized as core investments until 2030. This aims to expand secondary investment demand and broaden exit opportunities for existing investors, thereby encouraging private capital to flow back into the venture investment market.

Minister Han Seong-sook of the Ministry of SMEs and Startups stated, “Last year, domestic venture investment reached 13.6 trillion won, marking the second largest amount ever, with the number of investment deals also hitting a record high, keeping the venture investment market vibrant. With this investment program, we will make every policy effort to ensure that the 1.8 trillion won in venture funds selected are rapidly formed and that growth capital is supplied to ventures and startups in a timely manner.”

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