Korea's five major banking groups pledged to commit a combined 1 trillion won ($675.3 million) to support the country's venture and startup ecosystem, joining a government-led push to revive venture investment with private capital.
KB, Shinhan, Hana, Woori and NH Financial Groups signed a memorandum of understanding Thursday with the Financial Services Commission and the Ministry of SMEs and Startups, according to the companies and government agencies. Policy financing and guarantee institutions, including Korea Venture Investment Corporation, Korea Technology Finance Corporation and Korea Credit Guarantee Fund, also joined the agreement.
At the center of the initiative is an 800 billion won private-sector venture fund of funds to be formed through 2029, with 400 billion won earmarked for this year. Hana Financial Group will make the largest contribution, committing 400 billion won in total, or 100 billion won annually. KB, Shinhan, Woori and NH Financial will each commit 100 billion won over the four-year period.
Hana, KB, Shinhan and Woori will also create a 100 billion won limited partner growth fund, while Hana and NH will participate in a 20 billion won regional growth fund.
The support will extend beyond capital. Companies backed through the fund of funds will receive post-investment assistance to help them grow into unicorns valued at 1 trillion won or more, with the five financial groups using their global networks to support investor relations, follow-on investment, initial public offerings and overseas expansion.
The companies will also receive consulting and mentoring from experts at the financial groups, access to banking subsidiaries' accelerator programs, and support from affiliated venture capital units. They will also be promoted through banking apps.
"The essence of productive finance is helping aspiring entrepreneurs and venture companies secure capital when they need it," FSC Chairman Lee Eok-weon said. "Starting with today's agreement, we hope Korea's startup, venture and growth ecosystem will gain further momentum."
jwc@heraldcorp.com
