The city of Seoul completed raising KRW 50 billion of the Fourth Industrial Revolution Fund (duration: eight years, investment: four years) for startups that are related to the Fourth Industrial Revolution. The scale of the fund exceeded the initial goal by 200 percent and Seoul will start making investments in promising startups, business ventures, and small businesses in the first half of this year.
Seoul is raising money from 2018 to 2022 for the Seoul Innovative Growth Fund that will amount to KRW 1.2 trillion in order to help startups overcome “Death Valley.” The Fourth Industrial Revolution Fund is one of the seven subcategories.
The Fourth Industrial Revolution Fund will be invested in startups worth KRW 200-1,000 million (in the stage of Series A). More than 80 percent of the KRW 50 billion will be devoted to companies related to the Fourth Industrial Revolution and over KRW 26 billion will be invested in so-called ICT DNA businesses in the field of 5G, AI, blockchain, big data, etc. At least KRW 10 billion will be invested in small businesses or business ventures located in Seoul that are in fields related to the fourth industrial revolution.
The amount invested by Seoul is KRW 2 billion, which maximizes the “leverage effect” with a total capital amount of KRW 50 billion that can attract investments by K-Growth and other private areas.
Currently, Seoul’s initial investment in each startup amounts to USD 107,000, which is roughly a third of the global average of USD 284,000. Thus, the city has plans to take the lead in supporting the growth of innovative business ventures by actively raising funds to support their initial development through investment in promising businesses.
According to the trend of investment in business ventures in 2018 announced by the Ministry of SMEs and Startups, the scale of South Korea’s business venture investment is constantly growing. However, the total sum of Seoul’s initial investment is USD 85 million. Compared to the amount invested by cities in other countries, this amount is equivalent to 10 percent of the global average (USD 837 million)*. The investment per business and the total sum are necessary for continuous expansion.
* Source: Startup Genome, Global Startup Ecosystem Report 2019
Out of seven subcategories of the Seoul Innovative Growth Fund, the Cultural Contents Fund has reached a total of KRW 40 billion, exceeding the original goal of KRW 15 billion by 267 percent. Investments began in March during which the first company received such an investment.
Additionally, active investment is underway in the fields of animation, culture & webtoons, games, characters, VR/AR, AI, holograms, AD Tech, and more.