South Korea Launches 640 Billion Won ‘Startup Korea Fund’ to Boost Deep-Tech Ventures

On August 29, South Korea’s Ministry of SMEs and Startups revealed the establishment of 22 Startup Korea Funds, totaling 640 billion won. Launched last year, the initiative aims to back deep-tech startups targeting global markets, drawing contributions from the government, financial institutions, large corporations, and small and medium-sized enterprises.

This year, the total fund of 641 billion won will include 248.8 billion won from 27 private investors and 171.6 billion won from the parent Fund of Funds. Sector-specific allocations include 262.5 billion won for ultra-gap and global sectors, 217 billion won for open innovation, and 160.6 billion won for the secondary market segment.

Among the private investors joining this year’s Startup Korea Fund, eight institutions—including Sungkyunkwan University Technology Holding Company and COSMAX—are making their first venture investments through the fund. The remaining 19 experienced investors have significantly increased their contributions compared with last year, highlighting growing confidence in Korea’s startup ecosystem.

Foreign participation is being seen for the first time, with Japan’s largest contract research organization, CMIC, joining alongside Korean-Japanese companies, the Korea-Japan Cooperation Companies Association, and the Tokyo Seikei Center to support the growth of ventures in their respective home markets.

This year also saw the creation of nine new venture funds under the “open innovation” sector, focusing on strategic industries expected to drive Korea’s future growth, including beauty, biotechnology, semiconductors, climate technology, and artificial intelligence (AI). These funds aim to foster cross-industry innovation and commercial development.

In the cosmetics sector, Kolmar Korea and COSMAX will each set up venture funds worth 20 billion won to invest in K-beauty brands and beauty tech startups. 

A number of major companies, such as GS Engineering & Construction, Hyundai Marine & Fire Insurance, LX Semicon, POSCO Holdings, and NH NongHyup Financial Group, plan to leverage the fund to expand partnerships with deep-tech startups across their operations, reinforcing the broader innovation ecosystem.

The secondary market sector of the fund focuses on buying out equity held by existing investors or founders. This strategy expands the exit market, facilitates positive cash flow, and supports sustainable growth within Korea’s startup ecosystem.

Minister of SMEs and Startups Han Sung-sook emphasized the importance of attracting diverse private funds to elevate Korea’s venture investment ecosystem to a global standard. She added that the Fund of Funds will continue to provide a platform for more institutions to participate in venture investments, while regulatory improvements will encourage bolder private-sector engagement.