Venture capital investments surpassed record-breaking 5 trillion won in cumulative figures for the first nine months of this year. Q3 venture capital investments amounted to a record high of 2.067.8 billion won.
The Ministry of SMEs and Startups (MSS) said venture capital investments in the first to third quarter of the year stood at 5,259.3 billion won, a 81.8 percent jump over the same period of last year when 4,304.5 billion won was reported.
The ICT service sector topped with 1,549.7 billion won in Q1 to Q3 cumulative figures, followed by the bio/medicine sector with 1,203.2 billion won and the distribution/service sector with 1,085.7 billion won.
The top three sectors accounted for about 73 percent of the total cumulative amounts.
The non-face-to-face sector saw cumulative venture capital investments soar 94.4 percent over a year ago to 2,686 billion won. The figure accounted for 51.1 percent of the cumulative total.
The number of companies which attracted more than 10 billion won from venture capitalists stood at 104, a double-digit jump over the same pored of last year.
Venture capital investments in the third quarter of the year stood at 2,067.8 billion won, a 67.1 percent jump over the same period of last year.
It was the first time that venture capital investments have surpassed 2 trillion won on a quarterly basis.
Park Yong-soon, director general for venture innovation policy at MSS said, “If this trend continues, venture capital investments are most likely to top 6 trillion won for the whole of this year.”
Revision of the Act on KOTEC Diversifies KOTEC’s Assurance-Linked Investments
The cabinet approved a revision of the Act on Korea Technology Finance Corp. (KOTEC), expanding KOTEC’s assurance-linked investments.
The revision was approved by the National Assembly on Sept. 29. KOTEC offered assurance-linked investments to 87.5 percent of startups and 60.9 percent of provincial companies in 2020.
KOTEC was involved in an early stage of investing in Krafton, which was listed on a bourse in August 2021.
Thirty-one companies who benefited from investments by KOTEC had managed to make an initial public offering. But KOTEC’s assurance-linked investments were limited to stocks, convertible bonds and bonds with warrant.
They were insufficient to meet diverse investment demand from SMEs and technology prowess and growth potential.
The revision now allows KOTEC to diversify assurance-linked investments to the simple agreement future equity and others.
In particular, the simple agreement future equity will likely boost KOTEC’s assurance-linked investments to startups in an early stage, allowing swift investments without investment value evaluations, as it does startups in the Silicon Valley of the United States.
Lee Ok-hyung, director for venture innovation policy at MSS, said, “The revision of the Act on KOTEC will allow KOTEC to spearhead the easing of financial difficulties provincial SMEs and startups experience, thus contributing to regional balanced development and pump-priming for excellent SMEs and startups with technology prowess and growth potential.”
MSS Boosts SMEs’ Technology Trade & Commercialization
The Ministry of SMEs and Startups (MSS) announced the enforcement of the Act on the Expediting of SMEs’ Technology Innovation and its enforcement degrees on Oct. 20.
In order to expedite SMEs’ technology trade and commercialization, MSS will be allowed to perform duties, such as arbitrating and transacting of technology trade, supporting R&D, building, operating and managing information networks, buying and investing technologies, exploring demand and conducing surveys and analyses.
KOTEC has been designated as an institution responsible for conducting the duties. KOTEC will inaugurate a body charged with conducting the business while supporting the manufacturing of products will be offered by using “TechBridge,” a technology transaction platform for SMEs.
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