S.Korea's fund of funds to form new fund worth $215 mn with VCs in the US

NEW YORK – The South Korean government is poised to tap into its fund of funds to form a joint investment fund with venture capital firms in the United States worth $215 million.

The goal is to assist Korean startups’ fundraising and entry into overseas markets. US tech giants such as Google LLC and Oracle Corp. have also vowed to strengthen collaboration with South Korean startups.

A fund of funds is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities. 

The Ministry of SMEs and Startups held the Korea-US Startup Summit at Pier 17 in New York on Wednesday. 

The Korea Venture Investment Corp., the operator of the fund of funds, joins forces with Palo Alto-based late-stage venture capital firm RPS Ventures, New York-based growth equity company Millennium Technology Ventures, and Silicon Valley-based Applied Ventures LLC.

Seoul’s fund of funds injected 14% of the total amount, or 39 billion won ($28 million).

“We are drafting a global strategy with our local partners with the launch of the new fund,” Minister of SMEs and Startups Lee Young said. “We have officially kicked off the unicorn-making of the South Korean startup ecosystem.” 

Prior to the event, Minister Lee, Global Head of Government Affairs & Public Policy at Google Karan Bhatia, SVP of Field and Product Marketing at Oracle Dave Rosenberg, President of Hyundai Motor Co. Young-Woon Gong, and NAVER Cloud CEO Park Won-ki had a discussion on the topic of the core technology in the digital era in relation to the startup sector. 

“The Yoon Suk-yeol administration’s policy is to place the private sector in the driver’s seat in the economy,” Lee said. 

Hyundai’s Gong said that while the automotive group began nurturing startups as a means to give back to society, the strengthened collaboration between the conglomerate and budding startups now is for the company’s own growth. 

Startup Minister Lee and Oracle’s Rosenberg held a commemorative ceremony on the same day to celebrate the agreement to run a joint startup accelerator program next year. South Korean startups can utilize Oracle’s products and technology.

The accelerator will support 20 startups in the artificial intelligence (AI) and cloud sectors. 

On Sunday, Lee Young vowed to support the country’s startup ecosystem during her visit to the Silicon Valley branch of the Korea Innovation Center (KIC) after meeting with industry insiders. 

Write to Joo-Wan Kim at kjwan@hankyung.com
Jee Abbey Lee edited this article.