The Ministry of SMEs and Startups reported on the 28th that 79 venture capitals worldwide applied for the establishment of a global fund for overseas venture capital this year.
The global fund is a project that invests the fund of funds in funds operated by excellent overseas venture capitals and requires that the amount invested be more than the fund of funds investment in Korean corporations. It has been operating since 2013.
As of now, a total of 73 funds worth 12.2 trillion won are being operated globally. A total of 645 Korean venture corporations and startups, including Toss, Carrot, and Rebellion, have received investments worth 1.3 trillion won.
This year, the global fund increased its investment budget to a record high of 170 billion won and expanded the individual fund investment limit to a maximum of $50 million (about 68.7 billion won). The investment fields have also been diversified to include the establishment of artificial intelligence (AI) and climate tech sectors.
The Ministry of SMEs and Startups received applications from domestic and foreign venture capitals until the end of April after announcing the global fund investment notification in early March through Korea Venture Investment Corporation. A total of 79 investment firms applied, and the total amount submitted was approximately $13.5 billion (about 18 trillion won). The requested investment amount was approximately $716 million (about 1 trillion won), resulting in a competition ratio of 6:1 based on the investment budget of 170 billion won.
By region, venture capitals from 28 places in the United States, 27 in Asia, 17 in Europe, 5 in China (including Hong Kong), and 2 in the Middle East have expressed their intention to participate in the global fund.
Korea Venture Investment Corporation plans to evaluate the fund management capabilities, fund formation potential, and contributions to Korean investment from the applying venture capitals based on document reviews and on-site due diligence conducted in June, with the final selection of global fund operators to take place in July. The selected operators will begin fund formation in December of this year.
Kim Bong-deok, the head of venture policy at the Ministry of SMEs and Startups, noted that the global fund would not only have the effect of attracting investments for domestic ventures and startups but also could provide significant opportunities for overseas expansion by connecting with the networks held by global investors. "We aim to establish more than 1 trillion won in global funds each year to support domestic ventures and startups in attracting overseas investments and global expansion," he said.