Kakao Joins Hands with Government to Help Younger Startups

Kakao, the developer of successful mobile messaging service Kakao Talk, has joined hands with the government to help support and foster young companies. Yesterday, ET News reported that the SMBA and Kakao signed an agreement to create a 30 million won ‘Kakao Young Entrepreneur Fund’. This is the first time that a successful venture has joined the government in creating a fund to support the growth of young companies.

The fund supports the rapidly increasing number of young companies due to the development of mobile technology and apps in the ICT industry, and aims to create a healthy cycle of founding, investment, growth, recovery and investment. The fund will focus on investment in promising young companies and businesses that create jobs for the younger generation of workers.


Kakao’s fund is scheduled to launch in May and is made up of 10 billion won from Kakao, 18 billion won from “Fund of Fund” and the rest from other avenues. Last year, Kakao founder and serial entrepreneur Brian Kim established the startup-focused venture capital firm K Cube Ventures which has invested in 12 companies so far.

Some have gone as far as to say that this fund may open the road for a “Paypal Mafia” type effect on Korea’s venture ecosystem. Previously reinvestment in new companies and serial entrepreneurship didn’t happen due to capital from loans, takeovers and inadequate recovery on the finance markets.

The SMBA has plans to take on other successful venture companies and increase the Young Entrepreneur Fund from between 40 and 100 billion won. The plans extend to 2017, with hopes to increase the fund to 26 billion won by this time.

Kakao president Seok-woo Lee commented on the fund, saying, “Different to existing funds which only invest, our investors will also share entrepreneur experience and know-how.”

Director of the SMBA Jeon-hwa Han said, “We plan to make this year one in which we create a Korean venture and entrepreneur ecosystem where our youth can really put in all they want. In the future we will create second and third versions of the Kakao fund with leading ventures, and focus on revitalizing M&A between companies and the KOSAQ market, as well as policy to increase angel investment finance.”

This post has been translated and adapted from the original article at ET News, a media partner of VentureSquare.

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