In a landmark development for South Korea’s venture investment landscape, the Ministry of SMEs and Startups, led by Minister LEE Young, joined forces with Hana Financial Group to inaugurate the nation’s first private venture fund. The ‘Private Venture Fund Launch Ceremony’ took place at the Seoul Startup Hub Scale-Up Center, marking the realization of the government’s ‘Plan to Create a Dynamic Venture Investment Ecosystem.’
The private venture fund, a significant component of the venture policy introduced last November, gained legal footing with the passing of amendments to the ‘Venture Investment Act’ by the National Assembly in March. These amendments officially came into effect on October 19, paving the way for the establishment of private venture funds and fostering a conducive environment for robust private capital inflow into the venture investment market.
Distinguished by its stability, scalability, and expertise, a venture fund functions as an indirect fund that invests in various venture funds supporting start-ups and venture companies. The establishment of this fund is anticipated to fortify the venture investment landscape in South Korea.
Launch of Korea’s First Private Venture Fund
Hana Financial Group has taken the lead by creating the inaugural private venture fund, injecting a total of 100 billion won ($77.3 million) with a 100% investment commitment. Hana Ventures, the financial group’s venture arm, outlined plans to concentrate on the top 10 super gap sectors and manage the fund for a decade.
The ceremony included a ‘Priming Water Ceremony’ organized in collaboration with the Ministry of SMEs and Startups, symbolizing the groundwork laid for the transformation of the venture ecosystem towards a more private-centric focus. During the event, Korea Venture Investment and Hana Ventures signed a business agreement, pledging mutual cooperation. This includes the transfer of operational expertise from Korea Venture Investment, a company that has managed Korea’s representative policy mother fund for 18 years, to Hana Ventures.
Following the launch event, a panel discussion involving key figures from the venture capital industry and academia deliberated on the trajectory of private venture funds. Recommendations surfaced on augmenting the resources of private venture funds, such as permitting retirement pension reserves to be invested in venture investment associations and strengthening associated tax benefits. Participants also emphasized the necessity of introducing a public-private venture fund system to further amplify fund sizes.
Minister LEE Young expressed her enthusiasm, stating, “The private venture fund is the first venture policy crafted with great effort from the perspective of a venture entrepreneur since taking office as minister. I am thrilled that the group was formed just one year after the announcement. The first private venture fund is expected to serve as a milestone in the industry as a monumental fund symbolizing the private-led venture investment market. The Ministry of SMEs and Startups will also spare no effort.”
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