S.Korea to invest in Korean-owned overseas startups

South Korea will expand startup nurturing programs into overseas venture companies launched by Koreans from next year as the country is stepping up investment in new tech companies with a goal of creating global unicorns, the Ministry of SMEs and Startups said on Wednesday.

Up to now, the government-backed startup funds have been funneled into South Korea-based companies, either owned by Koreans or foreigners.

But now that the government is keen to create global unicorns, or those with a corporate value of $1 billion or more, it will provide funding to both domestic and foreign startups as long as they are set up by Koreans, the ministry said at a meeting presided by President Yoon Suk Yeol.

"Now is the time for startups to expand their horizons globally,” Yoon said at a meeting arranged with startup founders and those planning to start new businesses.

“The government will be a strong supporter for young people to start businesses and expand into the global market.”

South Korea will inject a total of 14.2 trillion won ($10.7 billion) by 2027 into startups through venture funds to be created in the private sector. This includes some 2 trillion won it plans to raise by forming a Startup Korea Fund by the same year.

The figure of 14.2 trillion won is 13.6% higher than it had originally planned.

Financial services firms, venture companies, business groups and pension funds will be invited to join government-led startup funds with a focus on the fields of systems on a chip, artificial intelligence, deep tech, secondary funds and global investment funds, according to the ministry.



The government will also diversify its support methods for startups beyond subsidies and contributions to venture capital funds to extend loans to startups.

In 2024, it will spend 9.2% more to invest in startups than this year.

In detail, next year's investment in funds of funds will climb by 45% from this year, while injecting a total of 10 trillion won into startups going global, versus 9 trillion won earmarked this year.

Additionally, the government will amend visa regulations to make it easy for foreigners to start businesses in South Korea and land jobs at domestic startups.

Write to Ju-Wan Kim and Byung-Uk Do at kjwan@hankyung.com
 

Yeonhee Kim edited this article.