Rep. Kim Won-i, "The Chungnam fund is fully invested in the metropolitan area... It defeats the purpose of a regional fund."

Rep. Kim Won-i, "The Chungnam fund is fully invested in the metropolitan area... It defeats the purpose of a regional fund."

(Seoul = Yonhap News) Reporter Lee Sang-seo = About half of the 465.5 billion won in self-fund based on the 'Regional Venture Fund' of the Ministry of SMEs and Startups and local governments, which was prepared to foster local venture companies, was found to be concentrated in the metropolitan area.

According to data submitted by the Ministry of SMEs and Startups by Rep. Kim Won-i of the Democratic Party of Korea, a member of the National Assembly's Trade, Industry, Energy, Small and Medium Venture Business Committee on the 5th, from 2021 to 2025, there will be a total of 12 regional venture fund funds of the Ministry of SMEs and Startups and local governments, with a total amount of KRW 1.0223 trillion.

Of the 465.5 billion won of 12 sub-funds that receive investments from these parent funds and directly invest in companies, 47.6% was invested in companies in the metropolitan area.

Specifically, 64% of the 'Chungcheong Regional New Deal Venture Fund' of KRW 114.3 billion, 53.2% of the 'Gyeongnam-KDB Regional Innovation Venture Fund' of KRW 6.2 billion, and 49.2% of the 'Gyeongbuk-Jeonnam Regional Innovation Venture Fund' of KRW 12.8 billion were invested in companies in the metropolitan area.

In particular, in the case of the ‘Chungnam Corporate Growth Venture Fund’, the entire 3 billion won of its sub-fund was invested in the metropolitan area.

There are five sub-funds with investments in the metropolitan area of ​​less than 30%, including the ‘Gangwon Strategic Industry Venture Fund’ and the ‘Busan Innovative Scale-up Venture Fund’, which is less than half of the total sub-funds.

For this reason, it is pointed out that the original purpose of the regional fund, which is to encourage venture startups in non-metropolitan areas and revitalize the local economy by revitalizing investment, is not being achieved.

However, Rep. Kim said that the Ministry of SMEs and Startups explained, "If the local investment obligation is excessively set, there is a risk that the participation of private investors will be reduced, leading to the failure of fund formation or a reduction in size."

In fact, as of June this year, 64.9% of domestic venture companies, 88.9% of venture capitals, and 65.8% of accelerators were found to be operating in the metropolitan area.

Rep. Kim said, “In order to utilize the purpose of the system, the Ministry of SMEs and Startups must jointly implement measures to encourage startups and relocation of venture companies to non-metropolitan areas,” and added, “There is a need to prepare policies that promote the attraction of not only companies but also venture capital (VC) and accelerators (AC) to non-metropolitan areas.”