Government to Foster 10,000 AI/Deep Tech Firms Under 'Venture 4 Powerhouse Plan'

The Ministry of SMEs and Startups has announced an ambitious comprehensive plan to elevate South Korea to one of the top four venture powerhouses by 2030. This plan aims to foster 10,000 AI and deep tech startups, create 50 unicorn and decacorn companies, and achieve an annual venture investment of 40 trillion won, advancing 15 detailed tasks centered on four key pillars: technology, regions, talent, and capital. First, the focus is on strengthening the innovative technology-based startup ecosystem. To accelerate AI technology innovation, a portion of the approximately 50,000 GPUs secured by the government will be dramatically allocated for R&D by ventures and startups. The policy support system will be reorganized around six strategic industries – AI, bio, content and culture, defense, energy, and advanced manufacturing – to secure future growth engines. Significant investment will also be made in activating the capital market and fostering unicorn companies. Through the ‘Next-Generation Unicorn Discovery and Nurturing Project,’ staged investment and guarantees of up to 100 billion won per company will be supported, with a total of 13.5 trillion won planned for investment by 2030. Notably, a national account dedicated to pension funds and retirement pensions will be established within the Mother Fund (fund-of-funds), and a structure where the Mother Fund preferentially bears losses will be introduced to strengthen its role as a catalyst for private investment. Additionally, the scope of venture enterprise recognition will be expanded to include mid-sized companies, and the stock option limit below market price will be raised from 500 million won to 2 billion won to promote talent inflow. The business history limit for venture investment tax credit eligible companies will also be eased from 7 to 10 years to boost investment vitality. Active efforts will also be made in global market expansion and talent development. Starting with Silicon Valley, startup and venture campuses will be established in Tokyo, Singapore, London, New York, and other locations, while a global startup hub will be created in Seoul to assist domestic startups in their overseas expansion. Domestically, through the ‘Startup for All Project,’ 1,000 aspiring entrepreneurs will be identified annually, and 100 startup rookies will be selected to receive support for commercialization and investment attraction. Support for spreading a culture of re-challenge, unafraid of failure, will also be strengthened. A ‘Re-challenge Support Headquarters’ will be newly established, and comprehensive re-challenge support centers will operate in 19 locations nationwide. A 1 trillion won re-challenge fund will be created by 2030, and new technology guarantees will be introduced for re-established corporations of entrepreneurs with a history of unfulfilled guarantee obligations, serving as a solid backbone for re-challenge. Activating regional startup ecosystems is also a crucial pillar. Ten regional startup cities will be developed, centered on "5 Poles and 3 Special Zones," and up to 50% of Technology Startup Investment Program (TIPS) selections will be preferentially allocated to regional companies. A 3.5 trillion won regional growth fund will also be established, using the Mother Fund as a catalyst, to expand the startup ecosystem, currently concentrated in the Seoul metropolitan area, nationwide. The government plans to sequentially implement the key tasks of this plan starting from the first half of 2025, and will quickly announce calls for investment aligned with the Mother Fund 2.0 direction, thereby initiating the change. The M&A guarantee scale will be expanded to 200 billion won by 2030, and the activation of the secondary market for interim recovery will be promoted through the creation of secondary funds, aiming for a virtuous cycle within the venture ecosystem.