Mother Fund nurtures startups, National Growth Fund picks up the baton

A "relay" framework is taking shape in which the Mother Fund provides early-stage investment and growth support for innovative companies, with the National Growth Fund stepping in for follow-on investment.

The Ministry of SMEs and Startups and the Financial Services Commission co-hosted the "Mother Fund–National Growth Fund Relay Joint Event" on Tuesday at SVC Seoul in Mapo-gu, Seoul. The gathering brought together the two ministries, policy finance institutions, related agencies and private investors to share information on promising companies and match them with investment demand.

The Mother Fund is a flagship government-backed policy fund that expands the investment resources of private venture capital firms and supplies early-stage growth capital to startups and venture companies. The National Growth Fund was established to channel money from pension funds, financial institutions and policy finance bodies into large-scale follow-on investment for companies in their growth phase.

Last month, the Financial Services Commission held a kickoff meeting of a cross-ministry panel tasked with identifying high-growth companies. The commission agreed to work with the Ministry of SMEs and Startups to obtain information on promising companies the ministry has invested in and nurtured, in order to facilitate a smooth flow of growth capital.

Tuesday's forum gave private venture capital firms — chosen for their investment expertise and foresight — the opportunity to screen Mother Fund portfolio companies with strong growth potential and a need for large-scale follow-on funding, and to connect them with the National Growth Fund.

FSC Chairman Lee Eok-won said the government would use the forum as an opportunity to ensure continuity in large-scale capital supply while taking the lead in removing regulatory barriers that hinder the growth of innovative companies.

Ministry of SMEs and Startups First Vice Minister Noh Yong-seok said he hoped the event would serve as "a genuine bridge — going beyond simply introducing and sharing companies — so that the innovative ventures and startups the Mother Fund has discovered can leap forward into global big-tech companies through follow-on investment from the National Growth Fund."