Start-ups receive record investment

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Source: Joongang Daily.

Korean investment in local start-ups reached a record high of 2.54 trillion won ($2.3 billion) last year, shooting up 61.9 percent over 2013, largely thanks to contributions from the private sector. According to data disclosed on Tuesday by the Small and Medium Business Administration (SMBA), more than half of the new investments came from the private sector, including commercial banks, pension funds, conglomerates and successful start-ups that have grown into large businesses.

The private sector’s contribution of 1.5 trillion won to local start-ups in 2014 showed a drastic increase over the previous two years, due to the Park Geun-hye administration’s efforts to boost start-ups. National policy funds – central and regional governments, the state-run Korea Development Bank and their joint funds – put about 1 trillion won into start-ups last year.

The SMBA added that there were 481 start-up funds operating at the end of last year, holding a total of 12.2 trillion won. The SMBA said that the bigger boost from the private sector is a sign that the nation’s start-up ecosystem has improved and became more attractive to investors.

For full article, see Joongang Daily.

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Lending to technology start-ups takes off

2014_12_SME_startupLoans under the government’s “technology finance” initiative have reached nearly 6 trillion won ($5.4 billion).  A start-up created last September has a patent on enriching and refining waste produced in the manufacture of computer chips.

It is the first such technology in Korea, but the company lacked the collateral required for bank loans and was unable to secure the capital needed to build production facilities. But the start-up recently took out a 1.3 billion won loan from Shinhan Bank after the Korea Technology Finance Corporation (Kibo) and the bank conducted due diligence on the company and evaluated its technology. In addition, the technology-based company received 500 million won for management. Thanks to the loans, the start-up signed a contract with a conglomerate and expects about 1.5 billion won in annual revenue.

For full article, see Joongang Daily.