SMEs ministry says LIPS-backed startups draw 123 billion won in private investment

The SMEs ministry said that 765 small local businesses had drawn 123 billion won ($91.8 million) in private investment since it introduced its LIPS programme in 2023, and that 10 of them have since grown into medium-sized companies. Under the programme, a private investor puts money into a small local company first, and the ministry then matches it with a loan of up to five times the investment, capped at 500 million won ($374,167), plus business-development funding of up to three times the amount, capped at 200 million won ($149,667).

Companies backed by the scheme raised 15.07 billion won in 2023, 17.95 billion won in 2024 and 56.01 billion won in 2025, with a further 33.67 billion won arriving in the first eight months of this year. A total of 51 of the 765 companies went on to raise 39.2 billion won ($29.3 million) in follow-on funding.

Average revenue per company rose 43 percent to 1.09 billion won ($818,678) from 765 million won ($572,476), while average headcount climbed 31 percent to 5.3 from 4.0. Across the whole group, employment rose by 646 jobs.

For the 292 businesses less than three years old, revenue rose 188.1 percent and employment doubled; companies between three and seven years old recorded growth of 44.7 percent in sales and 22.4 percent in staff. Firms aged three to seven made up the largest share of recipients at 375 companies, or 49 percent.

People in their 20s and 30s run 42.9 percent of the funded companies, 5.6 times the 7.7 percent share recorded for small business owners generally in a 2024 survey. Their share has risen from 34.2 percent in 2024 to 46.6 percent this year.

Manufacturing remains the most common sector, at 42 percent across the period, followed by services at 17 percent and information and communications technology at 16 percent. In the provinces, manufacturing accounts for 49.7 percent of the 148 non-capital-region recipients.

The United States is the top export destination, taken by 43.2 percent of exporting recipients, ahead of Japan at 35.4 percent and China at 32.7 percent, and the number of destination countries has grown from 32 in 2023 to 57 in 2025.

Among the standout cases, skincare brand Power Player has sold $4.44 million worth of products in 40 countries, lifting revenue from 4.08 billion won ($3.05 million) in 2023 to 26.1 billion won ($19.5 million) in 2025 and drawing a 2 billion won ($1.5 million) follow-on investment from CJ ENM. Bean Space, a decaffeinated coffee bean supplier, grew sales from 12.6 billion won ($9.43 million) in 2024 to 31.5 billion won ($23.6 million) last year while employment rose 142.9 percent, and Jeju black-goat restaurant Andamiro Neulbom increased revenue from 2 billion won ($1.5 million) in 2023 to 2.9 billion won ($2.17 million) in 2025 and opened a second branch.

"With global demand for K-consumer goods growing, local startups are showing clear growth and emerging as attractive investment targets," said Kim Jeong-joo, the ministry's small business policy director. "The ministry will continue to widen private investment opportunities for promising local small businesses and add vitality to regional economies."