Five Major Financial Groups Pledge 1 Trillion Won for Startup and Venture Investment

In a significant move to bolster South Korea's innovation-driven economy, the nation's five leading financial groups – KB, Shinhan, Hana, Woori, and NH NongHyup – are joining forces with the government to inject a substantial 1 trillion won into the venture and startup ecosystem. This collaborative effort, formalized through a memorandum of understanding, signals a strong commitment to fostering a vibrant environment for new businesses and technological advancement.

The cornerstone of this initiative is the establishment of an 800 billion won "private venture fund" by 2029, with the five financial groups contributing 400 billion won in the current year alone. Hana Financial Group is taking a leading role, pledging 400 billion won over four years to spearhead the fund's creation. This private capital infusion is crucial for bridging the funding gap that often hinders promising startups from reaching their full potential.

Beyond direct investment, the partnership will enhance collaboration with policy funds, including the establishment of a 100 billion won "Limited Partner (LP) Growth Fund" co-invested with the government's Mother Fund. Additionally, a 20 billion won regional growth fund will support the expansion of local venture ecosystems. The financial groups will also leverage their global networks to provide comprehensive support to portfolio companies, assisting with investor relations, follow-on funding, initial public offerings (IPOs), and international expansion.

Furthermore, the financial groups will actively participate in the Ministry of SMEs and Startups' "Startup for All Project," a government initiative designed to discover and support 5,000 innovative entrepreneurs. Through this program, the financial groups will contribute 20 billion won, which will be matched by the Korea Technology Finance Corporation with 150 billion won in guaranteed loans. These loans will feature reduced guarantee fees and a higher guarantee ratio, easing the financial burden on aspiring entrepreneurs. This comprehensive approach, combining private investment, government support, and tailored assistance, is poised to significantly accelerate the growth of South Korea's startup landscape.

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Providing funds to entrepreneurs and venture companies when they need them is productive finance. We expect this agreement to further vitalize the startup, venture, and growth ecosystem.