This year’s total investment spending on venture businesses is expected to be 1.5 trillion won (US$1.4 billion), as opposed to 2013’s 1.4 trillion won (US$1.3 billion), the highest-ever amount spent in venture investment in Korea.
Lee Jeong-gap, CEO of the Korea Venture Capital Association (KVCA), spoke during a press meeting for the 2014 Outlook on Venture Capital in the KVCA office in Seoul. He said, “Last year the government pushed for aggressive venture funding and co-ops, and as a result, the environment became ripe for entrepreneurs trying to get a head start in forming venture businesses and funds. This year is expected to see increased spending on investment.”
CEO Lee said that from the most conservative perspective, investment spending will increase by 10 percent, and the amount could climb up to as much as 2 trillion won (US$1.9 billion).
In 2013, investment in venture businesses totaled 1.4 trillion won (US$1.3 billion), the highest amount since 2001. And the amount of funds invested in forming venture co-ops was 1.5 trillion won (US$1.4 billion), up 99 percent from 2012.
By category, investment increased from 28.5 percent to 35.2 percent in telecommunications, and from 8.5 percent to 10.6 percent in biotechnology. But it dropped in general manufacturing and cultural content, from 27.8 percent to 22 percent and 28.2 percent to 20.6 percent, respectively.
Investment was largely focused in newly-formed companies, and 366.9 billion won (US$343 million), or an 18 percent increase from 2012, was invested in companies that were less than 3 years old, reflecting an interest in fledgling startups.
Manager Park Jeong-chan of the Small and Medium Business Administration (SMBA) said, “There is a discussion involving President Park’s three year plan and its role in giving a boost to the KOSDAQ.” He also hinted that “Soon announcement will be made and a comprehensive plan will be unveiled to re-energize the KOSDAQ and Korea New Exchange, including a reformation of rules governing corporate M&As.” Park then went on to add, “This year in particular, support will be provided to local venture capital firms seeking overseas opportunities in markets such as China and India.”