[Exclusive] Korea Venture Investment Corp. Investee Company Writedowns Exceed KRW 1 Trillion for Second Consecutive Year

Accumulated Writedowns Reach KRW 6.8732 Trillion Since Launch of Korea Fund of Funds
Largest Losses in ICT Services Sector; Cultural and Machinery Equipment Sectors Also Rise
KVIC: "Continuous Monitoring Will Reduce the Number of Written-Down Companies"

The amount by which the enterprise value of companies invested in by sub-funds of Korea Venture Investment Corp. (KVIC) has been written down has exceeded KRW 1 trillion for two consecutive years. In particular, the largest writedowns occurred in the ICT service sector, which includes platforms, artificial intelligence (AI), and software. Korea Venture Investment Corp. mainly invests in domestic small and venture companies through the Korea Fund of Funds.

According to materials submitted by Korea Venture Investment Corp. to Assemblyman Kang Seungkyu’s office of the People Power Party on September 28, the amount of writedowns for companies invested in by sub-funds of the Korea Fund of Funds in 2024 reached KRW 1.0982 trillion, the highest level since the fund’s inception. In 2025, this figure is slightly lower at KRW 1.0717 trillion. The number of companies whose enterprise value was written down (excluding duplicates) was 767 in 2024 and 733 in 2025. The cumulative total of writedowns since the launch of the Korea Fund of Funds in 2004 amounts to KRW 6.8732 trillion.

According to Korea Venture Investment Corp., writedowns are recognized when companies are effectively suspended from business due to events such as default, shutdown, or closure; when a company is in a state of capital erosion; or when impairment events such as rehabilitation or bankruptcy proceedings occur. However, Korea Venture Investment Corp. explained that writedowns are accounting valuation adjustments reflecting the current value of investment assets, and these can change if the enterprise value recovers in the future.

By industry, the largest writedowns in both years occurred in the information and communications technology (ICT) service sector, which includes telecommunications, software, and information services. In 2024, the breakdown was as follows: ICT services (KRW 291.2 billion), electricity·machinery·equipment (KRW 278.3 billion), and video·performing arts·music (KRW 237 billion). For 2025, the figures were: ICT services (KRW 303 billion), video·performing arts·music (KRW 215.3 billion), and electricity·machinery·equipment (KRW 147.5 billion). Notably, writedowns in ICT services climbed more than threefold from KRW 55.1 billion in 2021 to KRW 156 billion in 2022, and have continued to rise since.

The number of sub-funds in operation has also increased, causing the scale of writedowns to trend upward recently. In 2015, there were 349 sub-funds, which surged to 1,111 by 2025. The scale of writedowns likewise rose from about KRW 281.4 billion in 2015 to KRW 806.2 billion in 2023, eventually reaching the KRW 1 trillion level in recent years. As a percentage of total formation capital in each year, the proportion of writedowns grew from 13.24% in 2015 to 35% and 23% in 2024 and 2025, respectively.

As of the end of June this year, the amount of writedowns had reached about KRW 76.4 billion. However, with the number of active sub-funds rising to 1,124, up from last year, the writedown amount is likely to increase as well. Additionally, since July, as Aswemake, which has been at the center of a recent accounting fraud controversy in the venture investment industry, also received an investment of KRW 14.2 billion from Korea Venture Investment Corp., scrutiny has intensified. Aswemake had attracted investment based on steady business growth, but it was later found that the financial performance figures were falsified; as a result, the company is now under investigation and audit by both regulators and authorities.

Assemblyman Kang Seungkyu stated, "The increase in enterprise value writedowns of companies invested in by the Korea Fund of Funds is a clear signal that there is a need to review post-investment management practices," and emphasized, "Korea Venture Investment Corp. must thoroughly supervise and monitor whether sub-fund management companies are carefully examining management conditions at investee firms."

A representative from Korea Venture Investment Corp. commented, "Due to the nature of venture capital investment in early-stage companies, some losses are inevitable. Nevertheless, sub-funds of the Korea Fund of Funds deliver an average annual rate of return of 8%." The official added, "Korea Venture Investment Corp. conducts regular status checks on all sub-fund operations and continuously monitors investee companies, including participating in biannual investment briefings." They continued, "We will continue to work to reduce writedowns in the future through regular management of sub-fund operators."

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