The South Korean government has announced the creation of a 4.4 trillion KRW venture fund aimed at nurturing AI and deep tech unicorns, expanding regional venture investment, and revitalizing the exit market. The Ministry of SMEs and Startups, in collaboration with the Ministry of Culture, Sports and Tourism, the Ministry of Oceans and Fisheries, and Korea Venture Investment Corp, will contribute 2.1 trillion KRW to establish various funds. This initiative targets not only high-growth sectors but also supports early-stage startups, youth, women, and impact ventures, especially in areas where private investment is limited. The plan also includes the establishment of global funds to facilitate overseas expansion for domestic startups.
A total of 1.3 trillion KRW will be invested in AI and deep tech, with 550 billion KRW directly contributed by the Ministry of SMEs and Startups to support tailored investments at each growth stage. The regional growth fund will receive a record 230 billion KRW, aiming to create over 3.5 trillion KRW in regional sub-funds by 2030. The global fund, backed by 130 billion KRW, will exceed 1 trillion KRW in scale, with a new global mother fund in Singapore managing $200 million by 2027. Dedicated funds for early-stage startups (325 billion KRW), re-challengers (200 billion KRW), youth (66.7 billion KRW), women (16.7 billion KRW), and impact ventures (33.4 billion KRW) will ensure stable funding.
To vitalize the exit market, secondary and M&A funds will see their investment quadrupled to 120 billion KRW compared to last year. A 200 billion KRW secondary fund will support liquidity for existing LPs, while a 100 billion KRW M&A fund will facilitate SME succession. The Ministry of Culture, Sports and Tourism will invest 499 billion KRW to create 731.8 billion KRW in cultural, IP, and film funds, and the Ministry of Oceans and Fisheries will establish a 21.5 billion KRW specialized fund for marine businesses. Policy improvements include a 20% regional investment requirement for sub-funds, relaxed performance incentives, and enhanced packages for fund investors.
Applications for fund proposals will be accepted online from February 19 to 26, with final fund managers selected in April after evaluations and presentations. Additional announcements for nine ministries and specific sectors will follow from February onwards. Regional governments can apply to operate mother funds from January 23 to February 26, with selections made in March. Through this large-scale policy funding, the government aims to systematically support innovative companies and reinforce a virtuous cycle in the venture investment market. Inquiries can be made to the relevant departments of the Ministry of SMEs and Startups, Ministry of Culture, Sports and Tourism, Ministry of Oceans and Fisheries, and Korea Venture Investment Corp.
This large-scale venture fund initiative is set to drive structural innovation across Korea’s venture ecosystem, focusing on AI, deep tech, and regional balance. The introduction of global funds and partnerships with overseas VCs will accelerate the internationalization of Korean startups, while policy incentives and regulatory improvements are expected to stimulate private investment and establish a sustainable investment-reinvestment cycle. Ultimately, this move positions Korea to strengthen its competitiveness in the global venture landscape and secure future growth engines.