The Ministry of SMEs and Startups (Minister Oh Young-joo, hereinafter referred to as the Ministry of SMEs and Startups) held a meeting with the venture investment industry on the 16th at the Korea Venture Investment Center in Seocho-gu, Seoul to discuss the direction of investment in the 25-year mother fund and ways to revitalize venture investment.
The meeting, which was hosted by Minister Oh Young-joo, was attended by a wide range of people, from mid-sized to large venture capitals to rookie venture capitals, including Chairman Yoon Geon-soo of the Korea Venture Capital Association. In addition, the Ulsan Creative Economy Innovation Center, representing the Creative Economy Innovation Center, which is responsible for discovering, fostering, and making early-stage investments in innovative startups in local areas, also attended.
As the first order of business at the meeting, the Ministry of SMEs and Startups took the time to explain the ‘2025 Mother Fund Investment Direction.’
This year, the SMEs and Startups Fund plans to invest a total of 1 trillion won to support the formation of a 1.9 trillion won venture fund. First, a 'global fund' worth more than 1 trillion won will be created to support domestic startups in attracting overseas investment. Starting this year, the investment areas will be diversified to include AI, climate tech, and secondary, and specialized operations will be conducted in consideration of preferred investment areas by country.
Next, the largest investment of 200 billion won will be made in the local sector. This is a follow-up measure to the 'Local Era Venture Fund Creation Plan' announced in November 2024, and the mother fund, local governments, local banks, and regional key companies plan to create a 'Local Era Venture Fund' worth over 1 trillion won over three years ('25-'27).
Considering the recent decline in initial investment, we will invest KRW 100 billion, a 25% increase from the previous year, in the early-stage startup sector. We will give preference to asset management companies that propose early-stage investment obligations so that funds other than those in the early-stage startup sector can also contribute to early-stage investment.
In addition, the mother fund investment business will be reorganized to be more market-friendly. In order to activate the intermediate recovery market, the purchase of old stocks will be temporarily recognized as the main investment (up to 20%) for two years ('25~'26), and the management and maintenance system will be completely reorganized to support venture capital's challenging investment.
After the Ministry of SMEs and Startups' explanation, time was spent discussing the direction of this year's mother fund investment and ways to activate venture investment.
Venture capitalists who attended the event requested the following: introduction of new venture investment participants such as retirement pension funds, support for activating the intermediate recovery market, expansion of bio investment reception, support for the globalization of domestic VCs, and support for the role of the Creative Economy Innovation Center as a public accelerator. The suggestions will be actively reflected in the '25-year mother fund investment project and future policy implementation process after internal review and consultation with relevant ministries.
Minister of SMEs and Startups Oh Young-joo said, “Even in difficult economic conditions such as increasing domestic and international uncertainty and slow domestic demand recovery, investment in innovative ventures and startups, which are future growth engines, must continue without wavering.” He added, “The SMEs and Startups Ministry will announce an early announcement of a 1 trillion won mother fund investment project in January to quickly supply funds to the venture investment market, and will temporarily recognize the purchase of existing shares as the main investment for the next two years to promote a virtuous cycle of ‘investment → recovery → reinvestment. ’”
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