Korean government to create 12 trillion won of a scale-up fund by 2022 for a second venture boom

The Korean government is set to infuse 12 trillion won (US$12 billion) in the system by 2022 to push the venture boom in the country for the second time post the 2000s. This scale-up fund will raise the amount for new venture investment to 5 trillion won (US$5 billion).  To create more than 20 unicorn companies with a value of over 1 trillion won (US$1 billion)and to promote the recovery of venture investment funds, the government has decided to create an M&A fund of 1 trillion won by 2021.

In addition, the government will drastically ease regulations on venture businesses by expanding the number of introducing sandbox regulations to over 100 within the year.

With new venture capital surpassing 3 trillion won (US$3 billion) last year and the number of new venture companies crossing 100,000 for the first time, the government’s plans will connect the venture boom with economic vitality and job creation.

The government announced a strategy to expand the second venture boom, which includes five strategic tasks like finding new businesses and high-tech start-ups, revitalizing private capital in the venture investment market, supporting scale-ups and globalization, promoting venture investment recovery and reinvestment and establishing a startup-friendly infrastructure.

A new “scale-up-only fund” worth 12 trillion won (US$12 billion) will be established for four years by 2022. The fund will be set up in the funding of funds that invests in venture capital and the growth support fund run by the Korea Development Bank and K-Growth. Through the scale-up fund, the government plans to raise its annual venture investment to 5 trillion won (US$5 billion), which is worth 3.4 trillion won (US$3.4 billion).

It will also create new funds to encourage companies and investors to participate in recovery markets. It will create and support ‘strategic venture investment funds’ so that private large companies and financial companies can start investing in start-up businesses and enter M&A. For this purpose, an ‘M&A-only fund’ worth 1 trillion won will be established by 2021. This is a fund to support a smooth recovery of the ever-increasing venture investment.

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