SMEs ministry reports record 8.9 trillion won venture investment

The SMEs ministry said Wednesday South Korea's first-half venture investment reached a record 8.87 trillion won ($6.28 billion), up 54.3 percent from a year earlier, driven by large investments in AI, semiconductors and robotics.

New venture-fund formation climbed 33 percent from a year earlier to 8.44 trillion won ($5.98 billion), the second-highest first-half total on record. Financial institutions contributed 2.61 trillion won to new funds, up 54.9 percent from a year earlier. The ministry said the increase reflected a March reduction in risk weighting on banks' investments in policy-purpose venture funds to 100 percent from 400 percent.

"Both venture investment and fund formation rose sharply in the first half, and the domestic venture-investment market has entered a full-fledged growth phase," Kim Bong-deok, the ministry's venture policy director, said.

Information and communications technology services received 1.86 trillion won ($1.32 billion), or 21 percent of first-half venture investment. The ministry linked the sector's strength to increased investment in AI-enabled technology. Electrical machinery and equipment received 1.54 trillion won ($1.09 billion), while biotechnology and healthcare received 1.5 trillion won ($1.07 billion).

Investment in companies operating for three years or less rose 56.4 percent to 1.83 trillion won. Among 16 early-stage companies that received at least 10 billion won, nine AI and robotics businesses drew 315 billion won of the 422 billion won invested.

Venture investment outside the capital region rose 104.7 percent from a year earlier, more than twice the 49.9 percent increase in the capital region.

The government plans to expand tax-benefit eligibility for deep-tech startups to companies up to 10 years old from seven and raise the corporate tax credit for domestic companies directly investing in venture firms in population-decline regions to 7 percent from 5 percent.