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Korea’s startup and venture investment hit all-time high in Jan.-July period

According to Pulse by Maeil Business News Korea,

The amount of new investment in startups in South Korea hit a record high in the first seven months of this year amid government incentives to boost innovation-led growth.

According to data released by the Ministry of SMEs and Startups and Korea Venture Capital Association on Tuesday, as much as 2.37 trillion won ($1.96 billion) went into Korean startups in the January-July period, up 23.7 percent from the same period last year.

The total amount of venture funds formed during the period also hit a record high of 2.06 trillion won, data showed.

The startups ministry said that Korea will be able to easily reach annual target of 4 trillion won in venture investment. The total amount of new investment in startups and small businesses jumped 16.3 percent in the first six months of this year from a year ago. In July, the amount increased 7.4 percentage points.

Data showed that 731.6 billion won worth of venture funds were formed in July alone, up 30.9 percent from the same month last year. The figure is more than three times that of 219.6 billion won – the average monthly amount in the first half of this year.

The ministry attributed the recent increase in venture funds to continuous efforts to foster a second venture boom and more private spending on venture funds.

Data showed that 1.5 trillion won, or 76.1 percent of total 2.06 trillion won in venture funds formed until July this year, was from private investment, which is more than three times than 491.2 billion won invested by public policy institutions. Last year, private investment accounted for 62.9 percent in the January-July period.

In particular, the amount invested by individuals in venture funds increased significantly. Of total investment in venture funds, individuals spent 151.9 billion won in the January-July period, already exceeding last year’s total of 130.6 billion won.

The ministry said that individual investors are gaining more interest in venture funds as an alternative investment scheme as they bring favorable returns and various tax benefits such as exemptions. Data showed that venture funds that closed last year raised 7.3 percent in annual returns and realized 1.45 multiples. Individuals, for example, that invested 100 million won retrieved 145 million won.

The ministry expected more individuals to invest in venture funds amid diverse investment means and expansion in tax benefits.

By Seo Chan-dong and Lee Eun-joo

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

Source: Pulse by Maeil Business News Korea (August 20, 2019)

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