The Ministry of SMEs and Startups and Korea Venture Investment Corporation said on the 14th they will move to strengthen regional investment infrastructure, including expanding region-based investment centers, to revitalize regional venture investment ecosystems.
Since 2006, the mother fund has created a total of 113 regional funds worth about 1.8 trillion won to support venture investment bases outside the greater Seoul area. Among these, the regional fund with the highest performance made early investments in listed companies mPLUS and Peptron, recording a return rate of 15.2% and a return multiple of 3.4 times. The average return rate of regional funds liquidated within the past five years was also tallied at 11.6%.
The Ministry of SMEs and Startups (MSS) and Korea Venture Investment Corporation plan to expand a virtuous cycle system for region-centered venture investment based on past performance.
Starting this year, a 20% regional investment requirement will be applied to sub-funds backed by the mother fund, and managers with strong investment records outside the greater Seoul area will receive preferences. More than 80% of the funds selected in this year's regular commitment program will be subject to additional investment obligations outside the greater Seoul area. The share of managers based in provincial regions also increased from a year earlier.
They also will work to expand the regional venture investment base. The regional growth fund, jointly formed and operated by local communities, local governments, and the mother fund, will be created at a scale of more than 2 trillion won over five years from this year through 2030. In the second half, they plan to create funds totaling 450 billion won across five regions: Daegyeong, Southwest, Jeonbuk, Daejeon, and Ulsan.
In particular, four science and technology institutes — Korea Advanced Institute of Science and Technology (KAIST), Daegu Gyeongbuk Institute of Science and Technology (DGIST), Gwangju Institute of Science and Technology (GIST), and Ulsan National Institute of Science and Technology (UNIST) — will participate as limited partners in the regional growth fund. Based on this, they also plan to pursue specialized funds for startup cities centered on the science and technology institutes.
Korea Venture Investment Corporation will also expand investment centers focused on key regions outside the greater Seoul area. Beginning in the second half, it will sequentially establish regional investment centers in Gwangju, Daejeon, and Daegu, and the existing Busan office will be expanded and reorganized into the Southeast investment center. The new centers will not only manage the regional growth fund but also serve as hubs of the regional investment ecosystem by discovering regional limited partners and fostering venture capital.
Kim Bong-deok, director-general for venture policy at the Ministry of SMEs and Startups (MSS), said, "The mother fund's role in nurturing the regional investment ecosystem is being proven by the high return rates of regional funds," and added, "We will promote policies to advance the regional venture investment ecosystem so that high-potential regional companies and regional investors can grow together."