Record-High Venture Investment Reaches 8.9 Trillion Won in First Half of This Year

New Fund Formation Hits Second-Highest Ever at 8.4 Trillion Won
Market Enters Full-Fledged Growth Phase

Venture investments in the first half of this year were tallied at nearly 8.9 trillion won, marking an all-time high for the first half of any year and surpassing the record set during the venture investment boom of 2022. Newly established funds also posted their second-highest figure ever, reaching the 8.4 trillion won range. Investments increased across all stages of company growth, including startups less than three years old, and across all industry sectors except gaming, leading to assessments that the market has officially entered a robust growth phase.

The Ministry of SMEs and Startups announced these findings on August 19 in its report, "Investment Trends and New Venture Fund Formation in the First Half of 2026." New venture investments during the first half of this year reached 8.8676 trillion won, a 54.3% rise compared to the same period last year. The amount raised by new venture funds jumped by 33.0% to 8.4366 trillion won.

Breaking down by investor type, policy finance investments rose 58.3%, while private-sector investments increased 28.1%. In particular, capital contributions from financial institutions in the private sector reached 2.6061 trillion won, a 54.9% increase from the previous year. This is seen as a direct result of risk weighting relief measures for venture fund contributions, which are part of productive finance initiatives.

ICT Services Receive Highest Venture Investment...Driven by AI

By industry, the top recipients of investment were information and communication technology (ICT) services at 1.86 trillion won (21.0%), electrical/machinery/equipment at 1.5359 trillion won (17.3%), and bio/medical at 1.5041 trillion won (17.0%). Over the past five years, ICT services have consistently attracted the most venture investment, reflecting a surge in funding for AI solutions and similar technologies. Compared to last year, venture investment surged most sharply in ICT manufacturing, electrical/machinery/equipment, and ICT services. Large-scale investments of 100 billion won or more in fields such as AI semiconductors, memory chips, and humanoids within the semiconductor and robotics sectors appear to have driven the total investment volume in these industries.

Notably, venture investment in the first half increased for both companies less than seven years old and those older than seven years, in terms of total funding and number of firms invested in. Investment in early-stage startups, defined as those less than three years old, reached 1.8282 trillion won—a 56.4% rise year-on-year. One of the factors was the ability of deep tech startups in AI, semiconductors, and robotics to secure major investments exceeding 10 billion won at the early stage, thanks to recognized growth potential and technological competitiveness. Based on data from venture capital firms and consortiums, 16 early-stage companies attracted major investments (421.8 billion won), of which 9 (315.3 billion won) operated in AI and robotics.

The Ministry plans to expand the scale of initial fund investments made through the Korea Fund of Funds so that early-stage companies with technological prowess and potential can continue to grow. In addition, the government will continue to provide policy support by giving preferential treatment to funds that invest a certain minimum ratio in early-stage startups, with the goal of further boosting early-stage investment.

Venture Investment Outside Seoul Metropolitan Area Doubled

Looking at venture investment trends by region, data from venture capital firms and partnerships show that investments in the Seoul metropolitan area reached 3.0972 trillion won in the first half, up 49.9% compared to the same period last year. This surge is attributed to concentrated investments around innovation clusters such as the Pangyo Techno Valley in Gyeonggi Province, particularly in the field of AI.

Venture investments outside the metropolitan area totaled 1.0647 trillion won, which is a 104.7% increase year-on-year. In Daejeon, investment volumes reached 435.9 billion won—the highest among non-metropolitan regions—thanks to a robust R&D infrastructure in the Daedeok Innopolis, leading to large-scale investments in strategic emerging industries such as life sciences and aerospace. The Chungbuk region also saw a 343.9% increase, attracting 101.2 billion won in venture investments, with a focus on bio and precision chemistry around the Osong Life Science Complex.

The expansion of venture investment is expected to generate tangible job growth, rather than just an inflow of capital. According to the Ministry’s analysis of employment shifts in startups that received venture investment over the past three years, employment grew by more than 11% after receiving investment, indicating a significant job creation effect. Of the employment increase following venture investment, around 60% was accounted for by young people, demonstrating a particularly positive impact on youth employment.

The government has announced plans to expand tax incentives for venture investment by revising the Restriction of Special Taxation Act. To ensure sustained investment in deep tech startups, which require a longer period for growth, the eligible company age for tax benefits will be extended from seven to ten years. In addition, the sunset provision for capital gains tax exemptions on share transfers by venture investment companies will be abolished, making the tax incentive permanent. Furthermore, the corporate income tax credit rate for domestic corporations directly investing in venture firms located in population-declining or population-concerned areas will be increased from 5% to 7%, further stimulating regional investment.

Kim Bongduk, Director General of Venture Policy at the Ministry of SMEs and Startups, stated, "Both venture investment and fund formation expanded dramatically in the first half of this year, marking the full-fledged growth phase for the Korean venture investment market. We will strengthen the Korea Fund of Funds’ role as a catalyst for risk capital, so that expanding venture investment leads not only to innovative growth for startups and venture firms, but also to job creation for young people and the revitalization of regional economies. We will push forward with policy support, such as tax incentives, in close cooperation with relevant ministries without any setbacks."

This content was produced with the assistance of AI translation services.