Korean Gov't to Set up 1.9 Tril. Won Fund of Funds
The Ministry of SMEs and Startups announced on Jan. 29 that last year’s venture investment in South Korea hit an all-time high of 4,277.7 billion won, up 25 percent from a year earlier. The amount broke the four trillion won mark last year and almost doubled in two years. The South Korean government is planning to raise a fund of funds worth 1.9 trillion won by investing 900 billion won in order to further accelerate the investment.
In 2018, the angel investment in South Korea totaled 553.8 billion won and exceeded the previous high of 549.3 billion won recorded in 2000. Especially, the angel investment in companies related to Industry 4.0 technologies such as healthcare and artificial intelligence jumped 27 percent to 1,706 billion won.
As a result, South Korea’s venture investment-to-GDP ratio rose to 0.22 percent last year to come in fourth behind those of the United States (0.4 percent), Israel (0.38 percent) and China (0.27 percent). In addition, the number of invested venture firms increased 15 percent to 1,608 and the number of those that received an investment of at least 10 billion won rose 33 percent to 68. Biotech firm D&D Pharmatech received an investment of 80 billion won to become the first South Korean company that attracted a venture investment of 50 billion won or more for one year.
The investment from private funds accounted for 35 percent of the total venture investment last year and the ratio is continuing to increase. The investment from the funds of funds that the South Korean government raised in 2017 represented 21 percent of the total.
Meanwhile, the size of new venture funds decreased 14.7 percent to 4,110.5 billion won in 2019. This is because institutional investors’ participation in venture funds showed a year-on-year decline of 928.9 billion won.