DAEJEON < invest Korea

According to Pulse by Maeil Business News Korea,

Mayor of Daejeon Metropolitan City Lee Jang Woo visited the Silicon Valley Bank, a U.S. state-chartered bank in corporate banking in San Jose, as part of the city’s efforts to transform Daedeok Innopolis, a product of science and technology and the cradle of venture companies in South Korea, into a global innovation cluster to attract investments in new industries and technologies.

This move is likely to kick into gear the city’s initiative to set up a “bank headquartered in Daejeon that is dedicated to corporate banking services,” a pledge both President Yoon Suk-yeol and Mayor Lee made. Daejeon City also plans to push ahead with its project to create an investment agency tentatively named “Daejeon Investment Agency” this year prior to building the venture investment bank in the city.

SVB, the role model for the South Korean investment bank, has directly or indirectly provided funds to more than 30,000 venture companies since its establishment in Silicon Valley in 1983 and posted total assets of about 262 trillion won ($209.8 billion) and a net profit of 2.3 trillion won at the end of 2021.

Lee held a meeting with SVB executives, including managing directors Li Song and Janice Ahn, and had long discussions on the design of startup loans in Silicon Valley and setup of a platform to nurture innovative startups. In the meeting, Lee called for an investment in building the Daejeon Investment Agency, saying, “We have sufficient investment within the country, but SVB’s participation can lead the company to set foot in the South Korean market and even create synergies for market expansion.”

“We understand the purpose and need to create a corporate bank and an investment agency in the city and I believe we can cooperate in a broader framework,” Managing Director Li Song said. He proposed Daejeon to invest in SVB first as it will allow both sides to work better and could lead to collaborations.

“We will proactively consider investing in corporate funds managed by SVB and review an official proposal in the first half of this year when we get the results of the city’s outsourced study on the investment agency project,” Lee said.

Project details are likely to materialize this year. Daejeon plans to register the agency with the Financial Services Commission in the second half and launch the agency by the end of the year. Feasibility study and establishment plans have already begun, and the blueprint may come out as early as March. Daejeon Investment Agency will be the first financial company for new technology established by a local government.

The city of Daejeon will invest 50 billion won in public funds and additionally raise private funds to secure 70 billion won in capital within this year. So far, Shinhan Financial Group Co., Hana Financial Group Inc., KDB Industrial Bank and Koryo Credit Information Co. have promised to invest. The city also plans to establish a public fund worth more than 500 billion won before setting up the investment bank and invest over 60 percent of the fund in the region’s key strategic industries such as nano semiconductors, bio, space and defense. “Daejeon has the largest cluster of research and development manpower and has the largest number of startups in the country with 10.3 per 100,000 people, and having a venture investment bank modeled after those of the Silicon Valley will greatly contribute to national wealth,” Lee said.


By Cho Han-pil and Choi Jieun

Copyrights Pulse by Maeil Business News Korea. All Rights Reserved.

Source: Pulse by Maeil Business News Korea (Jan. 11, 2023)