The stakes are rising in Korea’s venture ecosystem. With ₩640 billion ($475 million) now committed, the Startup Korea Fund 2025 is positioned not only as a capital pool but also as a strategic platform uniting corporate, financial groups, and debuting first overseas investors. By backing deep-tech, open innovation, and secondary funds, Korea is signaling where its startup economy is headed: global, collaborative, and investor-driven.

Korea Expands Venture Capital with Landmark Startup Korea Fund 2025

South Korea is strengthening its position as a hub for venture capital and deep-tech innovation with the launch of the Startup Korea Fund 2025, a program that brings together government, large corporations, financial groups, and — for the first time — overseas investors.

The Ministry of SMEs and Startups (MSS) announced on August 29 that the fund has completed its selection of venture partners. A total of ₩640.1 billion ($475 million) will be committed across 22 sub-funds, targeting startups in strategic sectors from artificial intelligence and semiconductors to biotech and climate technologies.

Fund Structure: 27 Private Backers, Mother Fund, and 22 Sub-Funds

The Startup Korea Fund combines ₩248.8 billion (~$185 million) from 27 private investors with ₩171.6 billion (~$128 million) from the Korea Fund of Funds (“Mother Fund”), forming a mother fund that seeded 22 sub-funds with a combined scale of ₩640.1 billion (~$475 million).

Breakdown of allocations:

• Deep-Tech Global / Super-Gap: ₩262.5 billion (~$195 million)
• Open Innovation (newly created): ₩217.0 billion (~$161 million)
• Secondary (exit/recapitalization): ₩160.6 billion (~$119 million)

Eight institutions — including Cosmax and Sungkyunkwan University Technology Holdings — are investing in venture funds for the first time, while 19 existing participants such as POSCO Holdings, Hyundai Marine & Fire Insurance, LX Semicon, NH NongHyup Financial Group, and GS Engineering & Construction have expanded their commitments compared with last year.

First Overseas Participation in Startup Korea Fund 2025: Japan Joins Korea’s VC Platform

For the first time since the program’s launch, overseas entities are joining as investors.

Participants include the Tokyo Korean Business Center, Korean-Japanese cooperative groups, and CMIC, Japan’s largest contract research organization (CRO), which will collaborate with Korean biotech startups.

This milestone signals the growing recognition of Korea’s venture capital ecosystem as a cross-border investment platform and underscores the country’s ambition to attract global capital into its startup growth engines.

Open Innovation Funds Target Beauty, Biotech, and Climate Tech

The newly established Open Innovation track has seeded nine sub-funds designed to accelerate partnerships between established corporations and next-generation startups.

Notable examples include:

• Kolmar Korea and Cosmax, each creating ₩20 billion (~$15M) funds to invest in K-beauty brands and beauty-tech startups, reinforcing Korea’s position in the global cosmetics and consumer innovation market.
• The Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA), together with 15 member companies, launching dedicated investment initiatives in promising biotech and pharmaceutical ventures.

These sector-focused funds highlight Korea’s intention to integrate corporate innovation with startup agility across strategic industries such as beauty, biotech, semiconductors, climate tech, and AI.

Secondary Funds Boost Exit Pathways

The fund also allocates ₩160.6 billion (~$119 million) to secondary investments, aimed at purchasing existing shares from founders or early investors. By strengthening the exit market, these funds will help recycle capital, improve liquidity, and reinforce the long-term sustainability of Korea’s startup ecosystem.

Mobilizing Private Capital for Bold Growth

MSS Minister Han Seong-sook emphasized that mobilizing private-sector participation is central to Korea’s venture strategy:

“For Korea’s venture investment ecosystem to reach world-class standards, attracting corporate and financial sector capital into startups is the top priority. The Startup Korea Fund, alongside the Mother Fund, will act as a platform to expand participation and drive bold investment commitments. We will also pursue regulatory reforms to encourage greater private involvement.”

Startup Korea Fund 2025: Korea’s Bid for Global Leadership in VC

The launch of the ₩640.1 billion Startup Korea Fund marks a strategic pivot for Korea’s venture landscape. It signals:

• Integration of domestic and global capital in venture financing.
• Expansion of deep-tech investment capacity, particularly in AI, semiconductors, biotech, and climate solutions.
• Strengthening of the open innovation model, linking corporates with startups.
• Enhanced exit pathways through secondary funds, ensuring capital recycling and ecosystem sustainability.

For Korea’s startups, the fund offers more than financing — it provides global partnerships, corporate linkages, and a platform to scale internationally. For investors, it represents a structured entry into one of Asia’s most active and fast-evolving startup ecosystems.

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