The Ministry of SMEs and Startups said it held the Mother Fund investment strategy committee on the 20th, chaired by Minister Han Seong-sook, to discuss 2025 results and 2026 plans and development direction.
The Mother Fund investment strategy committee was launched in 2024 to systematically gather industry and expert opinions in the process of setting the Mother Fund's management strategy and key investment areas. Before the investment notice, the public and private sectors discuss investment direction together to increase predictability, and the results of the discussions are also reflected in the following year's budget proposal.
At the meeting, industry leaders including Minister Han Seong-sook, Song Byeong-jun, head of the Venture Business Association, Kim Hak-kyun, head of the Korea Venture Capital Association, and Lee Chang-hwa, executive director of the Korea Financial Investment Association, attended. Experts in the Mother Fund's key investment areas, including AI, bio, and global, were also present.
◇ In 2025, 1.3 trillion won invested… steady unicorn births and exits
In 2025, the Ministry of SMEs and Startups (MSS) Mother Fund invested a total of 1.3 trillion won to create venture funds worth about 3.3 trillion won. This supplied priming capital for investment in innovative ventures and startups. Among the portfolio corporations of sub-funds backed by the Mother Fund, three unicorns—FuriosaAI, Benow, and Galaxy Corporation—emerged in 2025. Also, with 74% of companies listed on KOSDAQ in 2025 appearing as Mother sub-fund portfolio corporations, the Mother Fund played a central role in nurturing unicorns and fostering the growth of innovative companies.
The average annual internal rate of return (IRR) of Mother sub-funds completed in 2025 was 7.5%, a level similar to the cumulative average return (8%) from 2005 to 2025. Considering that many funds in relatively less profitable sectors—culture, film, and angel—were liquidated, the return excluding these was 9.3%, showing a steady trend. In particular, regional liquidation funds posted a 9.7% return, demonstrating the potential of regional funds that invest in industries strategically fostered by local governments.
◇ Fostering AI and deep tech, 2 trillion won for regional growth funds over five years
The Ministry of SMEs and Startups (MSS) plans to expand the Mother Fund's 2026 investment to a total of 1.6 trillion won to strengthen its role as a platform for fostering AI and deep tech unicorns and for venture investment.
It will fully launch a next-generation unicorn fostering project that concentrates investments by growth stage in AI and deep tech ventures and startups, and will also strengthen efforts to attract private capital such as pension funds and retirement pensions and to bring global investors' venture capital into the domestic market. It will continue to supply priming capital to areas where the market does not invest sufficiently—regions, early-stage startups, second-chance founders, and youth—and will actively support the basis of the exit market by revitalizing M&A and the secondary market.
To promote regional investment by the Mother Fund, it will impose a 20% mandatory regional investment ratio on general Mother Fund investment programs and give preference to funds proposing additional investment obligations. It will expand management fee incentives based on early-investment performance to support early investment activation and extend through 2030 the special recognition of primary investment purpose for secondary share purchases (up to 20%).
The Ministry of SMEs and Startups (MSS) plans to build a regional growth fund, a community investment platform led by regional universities, corporations, banks, and public institutions, to a scale of more than 2 trillion won in master funds and 3.5 trillion won in sub-funds over the next five years. Within five years, it aims to create at least one master fund in each of the 14 non-capital regions to spread regional venture master funds nationwide.
It will establish an operations committee for each master fund with community participation and provide an LP incentive package to secure resources for regional investment. It also plans to run incentives for regional managers to foster regional venture capital.
It also discussed ways to enhance transparency, efficiency, and stability in line with the expansion of the Mother Fund. The Ministry of SMEs and Startups (MSS) will introduce a Mother Fund disclosure system to more systematically release operating status and performance information. This will increase trust in the management of policy funds and improve perceptions in the venture investment market, thereby attracting private capital. It will visualize not only information across operations—investment commitments, formation, investments, and exits—but also liquidation returns and best cases among portfolio companies to make them easier to understand.
It will also establish a Mother Fund operations committee with participation from all investing ministries and private experts to set efficient investment directions across the government. To ensure the Mother Fund can be run long-term and stably, it will proceed with all related procedures for extending its duration and clarifying the basis for reinvestment.
Minister Han Seong-sook said, "Over the past 20 years, the Mother Fund has identified promising ventures and startups and nurtured them into unicorns, playing a key role in helping the domestic venture investment market grow into one of the world's top five," adding, "Based on today's discussions, we will strengthen accountability and enhance our role as a venture investment platform so the market can leap to an annual size of 40 trillion won."