South Korea’s Top 5 Financial Groups to Invest 1 Trillion Won in Venture, Startup Support

KB Financial Group, Shinhan Financial Group, Hana Financial Group, Woori Financial Group and NH NongHyup Financial Group will invest 1 trillion won to support venture companies and startups.

The Financial Services Commission said the government and the five financial groups (KB, Shinhan, Hana, Woori and NH) signed a business agreement on Wednesday to boost venture investment and 추진 the “Startup for All Project.”

Attendees included Minister of SMEs and Startups Han Seong-sook, Financial Services Commission Chairman Lee Eok-won, the chairmen of the five financial groups, and the heads of six related organizations including Korea Venture Investment Corp. and the Korea Technology Finance Corp.

The agreement is aimed at linking the capital and capabilities of the five financial groups with the venture and startup ecosystem to accelerate a shift toward “productive finance” and expand private-sector-led venture investment.

Under the plan, the five groups will create an 800 billion won private venture fund-of-funds by 2029, starting with 400 billion won this year. Hana Financial Group will contribute 100 billion won a year beginning this year, for a total of 400 billion won. Hana, KB, Shinhan and Woori will also create a 100 billion won LP (limited partner) growth fund, while Hana and NH will participate in a 20 billion won contribution to a regional growth fund.

With the combined fund-of-funds totaling 920 billion won, and typical leverage from follow-on sub-funds running about seven to 10 times, officials said total assets under management are expected to expand to several trillion won.

The five groups also plan to use their overseas networks to help companies backed by the government’s fund-of-funds grow into unicorns — firms valued at 1 trillion won or more — by linking support for investor relations, follow-on investment, initial public offerings and overseas expansion.

The groups will jointly participate in the Ministry of SMEs and Startups’ “Startup for All Project.” The five groups will contribute 20 billion won, and the Korea Technology Finance Corp. will use the funds to launch a 150 billion won agreement-based guarantee program. Part of the contribution will be used to reduce guarantee fees for prospective entrepreneurs, fully waiving the fees and raising the guarantee coverage ratio to about 100% from 85%.

“Productive finance means ensuring entrepreneurs and venture companies can secure funding when they need it,” Lee said, adding he hopes the agreement will further energize the startup and venture ecosystem.

Han said the agreement was not merely a declaration of cooperation but “a starting point” for connecting the expertise and resources of the five financial groups with the startup and venture ecosystem to meet the challenges of the times.