The Korean Ministry of SMEs and Startups has disclosed the venture capital investment and fundraising trends for 2023. Here’s a detailed analysis of VC performance last year.

In 2023, VC investments totaled around USD 8.4 billion, marking a 35% increase from the pre-COVID-19 peak. Despite a 12% decrease compared to the exceptional surge in 2022, it sustained a medium to long-term growth trend, with an average annual growth rate of 16% since 2008.

The amount of VC fundraising in 2023 reached approximately USD 9.8 billion, reflecting a 28% increase compared to the pre-COVID-19 peak. Though it decreased by 28% from 2022, the sector maintained a medium to long-term growth trajectory, growing at an average annual rate of 18% since 2008.

The South Korean government plans robust support for the domestic venture investment market, aiming for a significant leap beyond 2024. The focus includes swift injection of policy finance into venture funds, establishing public-private funds, and diversifying investment sources to solidly support the medium to long-term growth of the venture investment market.

Firstly, the government will promptly deploy the entire 2024 budget of KRW 910 billion for the Small and Medium Venture Business Department’s fund-of-funds (FOF) within the first quarter as part of the policy finance injection. Secondly, efforts will be made to expedite discussions and gather opinions from private investors for the jointly created ‘Startup Korea Fund,’ formed by the public and private sectors.

Thirdly, to enable Korean venture capitals to accumulate the necessary investment track record for attracting foreign investors, there will be an expansion in the share of joint funds operated with foreign venture capitals in the ‘Global Fund Investment Project’ within the fund-of-funds.

Minister of SMEs and Startups Oh Young-joo stated, “The domestic venture investment market demonstrated outstanding recovery capabilities compared to major overseas countries in 2023.” He added, “Considering the substantial industry consensus that the market conditions will further improve in 2024, with increased investment plans compared to the previous year, we plan to mobilize appropriate policy tools to maintain this positive atmosphere.”