This article was published on Sept. 2, 2025, at 3:05 p.m. on the ChosunBiz MoneyMove website.
Since the inception of the Lee Jae-myung administration, the commitment to fostering advanced strategic industries has been consistently evident, and the landscape of the investment market is changing. Institutions managing public funds have primarily focused on private equity fund (PEF) investments, giving relatively less weight to venture capital (VC) investments, but recently there has been a significant increase in VC investment amounts.
On the 2nd, according to investment banking (IB) industry sources, the Korea Science and Technology Personnel Mutual Aid Association is reportedly set to announce a regular investment plan for PE and VC soon, with a significant increase in VC investment compared to last year. During last year's regular investment phase, they invested 160 billion won in PE and 105 billion won in VC.
The day before, the Korea Federation of Small and Medium Enterprises announced that it would invest a total of 180 billion won in VC. Last year, they invested 110 billion won, which means an increase of 70 billion won. Earlier, in early August, the Military Mutual Aid Association also decided to invest 140 billion won in VC, an increase of 20 billion won compared to last year.
The General Assembly Pension Foundation, which manages the pensions of pastors, also increased its investment in PEF, private debt funds (PDF), and VC from a total of 50 billion won last year to a total of 100 billion won this year. Korea Growth Investment Corporation (K-Growth) set its investment for the '6th Innovation Technology Fund' at 160 billion won, which is double the amount of the 5th fund investment of 87 billion won executed last year.
The current government's commitment to cultivating advanced innovative technologies is strong. Given the nature of VCs, which have a high investment ratio in early-stage technology companies, there are prospects that funds from investors (LPs) will flow significantly into the VC market.
The government recently decided to allocate 50 trillion won for the 'Advanced Strategic Industry Fund' under the Korea Development Bank. With additional private funds, the government plans to create a 'National Growth Fund' to support a total of over 100 trillion won in funds over the next five years.
An IB industry official noted, 'Since it is bank funding, the proportion directed towards loans will be high, but at least about 30% is expected to flow into VC and PE.'
While there are projections that the VC market may regain some vitality, small and medium-sized VCs are still struggling. An official from the VC industry explained, 'Since mutual aid associations must manage the pensions of their members, they can only invest primarily in large VCs with higher investment success rates.'
Currently, some mutual aid associations are dividing the leagues into 'large' and 'small' when investing in VCs. However, industry officials say that even in the small league, VCs with assets under management (AUM) at a certain level are typically selected.
An IB industry official stated, 'Genuine small VCs have no choice but to rely on policy funds like the Korea Venture Investment Corporation or K-Growth, and it is still a long way to feel the atmosphere of increasing funds in the market.'