The amount of venture investment collections from January to August this year hit a record high at 1.8 trillion won (US$1.58 billion). Cafe24, the first company to go public under the so-called Tesla standards, had the highest payback in the initial public offering (IPO) with more than 100 billion won (US$87.97 million).
According to the Ministry of SMEs and Startups (MSS) on October 10, the amount of venture investment paybacks as of August this year came to 1.86 trillion won (US$1.63 billion), up 107 percent from 897.4 billion won (US$789.41 million) at the same period last year. It made 2.4 times, or 136 percent, higher profit compared to venture investment principal. The figure was higher than 1.69 times at the same period last year.
The amount of investment paybacks through IPOs or merger and acquisitions (M&As) increased by more than 2.2 times compared to a year earlier and the over-the-counter (OTC) sales, which is an intermediate recovery market, also nearly doubled.
An official from the ministry said, “The venture policy led by the private sector and supported by the government and the creation of secondary funds and M&A funds have activated the exit market. Nearly 2.8 trillion won (US$2.46 billion) of money is expected to be collected by the end of the year.”
A secondary fund makes profits by buying venture shares owned by venture capital firms and angel investors. It is the means that helps recover investment funds. A total of 57 associations have formed 1.53 trillion won (US$1.35 billion) worth of secondary funds and 1 trillion won (US$879.66 million) of money has been invested in 572 firms until now.
By industry, venture investment collections were activated mainly in new industries, such as biotech and information and communication technology (ICT), and there was a rapid increase in over-the-counter transaction of the gaming industry. The new industries, including biotech and ICT, were added to traditional investment like electronics and machinery last year.
The amount of venture investment collections through an IPO from January to August this year stood at 586.7 billion won (US$516.1 million), up 148.2 percent from 236.4 billion won (US$207.95 million) a year ago. The number of companies increased by 20 to 114, while the average amount of recovery per company doubled to 5.1 billion won (US$4.49 million). Cafe24, the first firm to be listed under the Tesla standards, showed the highest amount of recovery this year at 104.3 billion won (US$91.75 million).
In addition, biotech companies, which have been invested with expectations of high returns, have recently pushed ahead with an IPO in earnest so the amount of recovery significantly grew.
The amount of investment paybacks through the sale of OTC stocks stood at 859.6 billion won (US$756.16 million), up 112.5 percent from 404.4 billion won (US$355.74 million) at the same period last year. In particular, the gaming industry saw its venture investment collections increase over 700 percent as Tencent bought 238.7 billion won (US$209.98 million) worth of Bluehole shares over the counter.