Five of South Korea’s leading banking groups have pledged a significant 1 trillion won ($675.3 million) combined investment to bolster the nation’s burgeoning venture and startup ecosystem. This substantial commitment aligns with a key government-led initiative aimed at revitalizing venture capital through robust private-sector participation.
The landmark agreement was formalized on Thursday as KB, Shinhan, Hana, Woori, and NH Financial Groups signed a memorandum of understanding (MOU) with key government entities including the Financial Services Commission (FSC) and the Ministry of SMEs and Startups. Crucially, major policy financing and guarantee institutions, such as the Korea Venture Investment Corporation, Korea Technology Finance Corporation, and the Korea Credit Guarantee Fund, also joined the comprehensive accord, underscoring a unified approach to strengthening startup finance.
Central to this strategic initiative is an 800 billion won private-sector “fund of funds” set to be established by 2029, with an immediate allocation of 400 billion won targeted for this year. Hana Financial Group emerges as the largest contributor, committing a total of 400 billion won, dispensed at 100 billion won annually. Meanwhile, KB, Shinhan, Woori, and NH Financial will each invest 100 billion won over the four-year period, demonstrating a collective dedication to fostering innovation.
Further diversifying the investment landscape, Hana, KB, Shinhan, and Woori are also collaborating to create a 100 billion won limited partner growth fund. Additionally, Hana and NH will jointly participate in a 20 billion won regional growth fund, targeting localized entrepreneurial development.
This comprehensive support extends well beyond mere capital infusion. Companies receiving backing through the newly formed fund of funds will benefit from extensive post-investment assistance. The goal is to cultivate these promising ventures into “unicorn” companies, valued at 1 trillion won or more. To achieve this, the five prominent financial groups will leverage their expansive global networks to provide crucial support in investor relations, facilitate follow-on investments, guide initial public offerings (IPOs), and aid in critical overseas expansion efforts.
Beyond financial and networking support, the selected companies will gain access to invaluable consulting and mentorship from seasoned experts within the financial groups. They will also be integrated into the banking subsidiaries’ established accelerator programs and receive specialized assistance from affiliated venture capital units. Furthermore, the innovative ventures will benefit from broad promotion through the banks’ widely used digital applications, enhancing their visibility and market reach.
FSC Chairman Lee Eok-weon emphasized the core philosophy behind the initiative, stating, “The essence of productive finance is helping aspiring entrepreneurs and venture companies secure capital when they need it.” He added, “Starting with today’s agreement, we hope Korea’s startup, venture and growth ecosystem will gain further momentum,” signaling a renewed era of support for the nation’s innovative businesses.
jwc
