Daegu and Gyeongbuk launch 129.4 billion won regional growth fund for ventures
In short
The Ministry of SMEs and Startups said a fund-formation ceremony for the Daegu-Gyeongbuk Integrated Regional Growth Fund was held in Daegu on 21 October. The fund totals 129.4 billion won, including 75 billion won from the government fund of funds, and is described as the first parent fund combining regions. It plans to build a venture fund of about 200 billion won.
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The Ministry of SMEs and Startups said it held the formation ceremony for the Daegu-Gyeongbuk Integrated Regional Growth Fund at EXCO in Daegu on 21 October. The ministry said investor recruitment was complete and the fund would begin operating. The fund focuses on venture companies in the Daegu-Gyeongbuk region and is about 130 billion won, or 129.4 billion won in exact figures, according to Yonhap, Kukmin Ilbo, Seoul Shinmun and ZDNet Korea. [ 1 , 3 , 4 , 5 , 6 , 7 , 9 ]
The government fund of funds put in 75 billion won, the largest amount so far for a regional growth fund. The ministry and the outlets describe the fund as the fourth regional growth fund, after Jeonbuk, Ulsan and Daejeon, and as the first parent fund to combine regions. [ 1 , 2 , 3 , 6 , 9 ]
Investors include the city of Daegu, Gyeongbuk province, Gumi and Gimcheon, and the banks iM Bank, IBK, NH Nonghyup Bank and Hana Bank. The Daegu Gyeongbuk Institute of Science and Technology (DGIST), Kyungpook National University and the companies Isu Petasys (이수페타시스), Hwashin (화신) and Korea OSG (한국OSG) also took part. ZDNet Korea counted 13 investing institutions and said the 129.4 billion won includes 1.4 billion won from Korea Venture Investment Corp as fund manager. [ 1 , 3 , 6 , 9 ]
An operating committee of Korea Venture Investment Corp, Daegu, Gyeongbuk and the main investors will set the investment fields, and the plan is to build a venture fund of about 200 billion won through sub-funds. Yonhap, Chosun Ilbo, Asia Economy and ZDNet Korea say the sub-fund programme will start within this year. Kukmin Ilbo and Seoul Shinmun say it will start in January next year. Daegu city said the sub-funds would be designed so that at least 80% of the money must be invested in companies in the region, with a focus on technology startups, robotics, mobility, healthcare, bio, semiconductors and advanced manufacturing. Kukmin Ilbo and Seoul Shinmun also report that Daegu will hold monthly investor briefings. [ 1 , 3 , 5 , 6 , 7 , 9 ]
On the same day iM Bank, Korea Venture Investment Corp and the Technology Guarantee Fund signed a productive-finance agreement on venture funds and the venture ecosystem. The three bodies plan to build a support system linking investment, loans and guarantees. The ministry said it is the second such agreement with regional financial institutions, after one signed in February by Busan Bank, Kyongnam Bank, Korea Venture Investment Corp and the Technology Guarantee Fund. Newsis reported that iM Bank said it committed 17 billion won and plans to give venture firms preferential terms on business accounts and loans. [ 1 , 2 , 3 , 6 , 8 , 9 ]
Vice Minister Noh Yong-seok (노용석) called the fund a new attempt to connect the region's innovation capacity across administrative boundaries. He said the aim is a sustainable regional venture ecosystem built on cooperation between leading regional financial institutions and public venture-finance bodies. Daegu Mayor Choo Kyung-ho (추경호) said the fund creates a new investment base for young startups and deep-tech companies. Gyeongbuk Governor Lee Cheol-woo (이철우) said he hoped it would help struggling small businesses and that he would work to create a larger fund. [ 1 , 2 , 3 , 5 , 6 , 7 ]
ZDNet Korea reported that Jeonbuk formed a 100 billion won fund on 20 August, including 60 billion won from the fund of funds. It said Ulsan followed on 1 September with 50 billion won and Daejeon on 1 October with 54 billion won, and that the south-west region plans to form its parent fund in early November. It also reported that, according to the Korea Venture Business Association, 65.4% of the 38,369 venture firms were in the Seoul metropolitan area at the end of last year. [ 9 ]
Why it matters
The outlets describe the fund as a new model of cooperation between Daegu and Gyeongbuk that crosses administrative boundaries, aimed at venture and startup financing in the region. Its effect will depend on the sub-fund investment programme, which has yet to start.
Key facts
- The ministry held the formation ceremony for the Daegu-Gyeongbuk Integrated Regional Growth Fund at EXCO in Daegu on 21 October. [ 1 , 2 , 3 , 6 , 9 ]
- The fund is about 130 billion won, or 129.4 billion won in exact figures. [ 1 , 3 , 4 , 5 , 7 , 9 ]
- The government fund of funds put in 75 billion won, the largest ever for a regional growth fund. [ 1 , 2 , 3 , 6 , 9 ]
- It is the fourth regional growth fund, after Jeonbuk, Ulsan and Daejeon. [ 1 , 3 , 6 , 9 ]
- The plan is to start the sub-fund programme and build a venture fund of about 200 billion won. [ 1 , 3 , 5 , 6 , 7 , 9 ]
- Daegu city said it will design the sub-funds so that at least 80% of the money must be invested in companies in the Daegu-Gyeongbuk region. [ 5 , 7 , 9 ]
- iM Bank, Korea Venture Investment Corp and the Technology Guarantee Fund signed a productive-finance agreement on the same day. [ 1 , 2 , 3 , 6 , 8 , 9 ]
Confirmed by several sources
- The ministry said the Daegu-Gyeongbuk Integrated Regional Growth Fund had its formation ceremony in Daegu on 21 October, with investor recruitment complete. [ 1 , 3 , 6 , 9 ]
- The government fund of funds contributed 75 billion won, the largest amount so far for a regional growth fund. [ 1 , 2 , 3 , 6 , 9 ]
- Daegu, Gyeongbuk, Gumi, Gimcheon, banks, universities and companies are among the investors. [ 1 , 3 , 6 , 9 ]
- The fund is the fourth regional growth fund, after Jeonbuk, Ulsan and Daejeon, and the first integrated parent fund across regions. [ 1 , 2 , 3 , 6 , 9 ]
- iM Bank, Korea Venture Investment Corp and the Technology Guarantee Fund signed an agreement to link investment, loans and guarantees for venture firms. It is the second such agreement with regional financial institutions, after the one signed in February for the south-east region. [ 1 , 2 , 3 , 6 , 9 ]
Still unclear
- When the sub-fund investment programme starts. Yonhap, Chosun Ilbo, Asia Economy and ZDNet say within this year; Kukmin Ilbo and Seoul Shinmun say from January next year.
- Whether iM Bank holds the largest share among private participants. Only Newsis's iM Bank article says so, citing the bank, and it gives no figures for the other investors.
- Which sectors the fund will concentrate on. Chosun Ilbo and ZDNet say an operating committee will fix the fields. Kukmin Ilbo, Seoul Shinmun and Newsis name robotics, mobility, healthcare, bio, semiconductors and advanced manufacturing as the planned focus.
What local media are saying
Timeline, local time
- Chosun Ilbo, Newsis and Yonhap report that the ministry held the formation ceremony in Daegu on 21 October. [ 1 , 2 , 3 ]
- Yonhap reports from Daegu that the city and province formed the 129.4 billion won fund and began operating it. [ 4 ]
- Kukmin Ilbo reports that Daegu and Gyeongbuk held the ceremony, attended by the Daegu mayor and the Gyeongbuk governor. [ 5 ]
- Newsis reports that iM Bank said it committed 17 billion won to the fund. [ 8 ]
- ZDNet Korea reports the investor breakdown and the earlier regional funds. [ 9 ]