Fresh investments in venture companies hit a record high in the first seven months of this year.
The Ministry of SMEs and Startups (MSS) and the Korean Venture Capital Association (KVCA) announced on Aug. 20 that fresh investments in venture companies came to 2.37 trillion won (US$1.98 billion) from January to July. The total amount of money put in venture funds during the period stood at 2.06 trillion won (US$1.71 billion). The two figures are both all time highs.
Venture investments jumped 23.7 percent in the first seven months of this year from a year ago. If the current pace is maintained, fresh venture investments for the whole of this year are expected to top the annual target of 4 trillion won.
The total amount of venture funds formed in the first half of this year showed a decline from a year earlier, but 731.60 billion won (US$609.51 million) worth of venture funds was formed in July alone, more than three times the monthly average of 219.6 billion won in the first half of this year. The ministry expects that more and more venture funds will be created in the second half as institutional investors, such as the Fund of Funds and the National Pension Service, are expanding investment.
The ministry attributed the recent increase in venture funds to the government’s continued efforts to foster a second venture boom and a rise in private investment in venture funds. Data showed that 1.50 trillion won (US$1.30 billion), or 76.1 percent of the total 2.06 trillion won (US$1.71 billion), came from private investors, which is more than three times the 491.20 billion won (US$409.23 million) investment by public policy institutions. Last year, private investment accounted for 62.9 percent in the January-July period.
It is noteworthy that retail investors’ investment in venture funds has increased significantly. Of the total investment in venture funds, individuals invested 151.90 billion won (US$126.50 million) in the January-July period, already exceeding last year’s total of 130.60 billion won (US$108.72 million). The figure took up 7.4 percent of the total funds formed, a 4.7 percentage points increase from 2.7 percent last year.