Korea's first cross-regional integrated mother fund launches in Daegu, North Gyeongsang Province

South Korea is set to build a 200 billion won ($150 million) venture fund targeting startups in the Daegu and North Gyeongsang Province region, as the country's first integrated cross-regional mother fund officially launched Wednesday.

The Ministry of SMEs and Startups held a launch ceremony for the "Daegu-North Gyeongsang Integrated Regional Growth Fund" at EXCO in Daegu on Wednesday, announcing that the approximately 130 billion won mother fund had begun full operations.

Regional growth funds are vehicles jointly established by the government, local authorities and the private sector to broaden the investment base for regional ventures and startups. The Daegu-North Gyeongsang fund is the fourth such fund formed nationwide — following those in North Jeolla Province, Ulsan and Daejeon — and the first jointly established by two separate regions.

The Korea Fund of Funds is contributing 75 billion won to the mother fund, the largest single allocation in the program's history. Daegu, North Gyeongsang Province and the cities of Gumi and Gimcheon, along with financial institutions including iM Bank, Industrial Bank of Korea, NH NongHyup Bank and Hana Bank, have all committed capital.

Regional universities — including the Daegu Gyeongbuk Institute of Science and Technology and Kyungpook National University — as well as local companies such as ISU Petasys, Hwashin and Korea OSG also joined as contributors. The fund is notable for bringing together not only government resources but also local governments, the financial sector, industry and academia to build a regional venture investment foundation.

The mother fund's actual formation size stands at 129.4 billion won, which includes a 1.4 billion won general partner contribution from Korea Venture Investment Corp.

The Ministry of SMEs and Startups plans to finalize specific investment areas through a steering committee comprising Korea Venture Investment Corp., the city of Daegu, North Gyeongsang Province and key contributing institutions. The goal is to launch sub-fund investment operations before year-end and build a total venture fund pool of 200 billion won.

The mother fund operates by committing capital to multiple sub-funds rather than investing directly in individual venture companies. The structure is designed to draw in private investment capital and scale up funding for promising regional firms.

The financial support framework for regional venture companies is also being strengthened. On Wednesday, iM Bank, Korea Venture Investment Corp. and Korea Technology Finance Corporation signed an MOU on productive financial cooperation to invigorate the Daegu-North Gyeongsang venture fund and startup ecosystem.

The agreement is the second regional financial institution partnership of its kind, following an MOU signed in February by Busan Bank, Kyongnam Bank, Korea Venture Investment Corp. and Korea Technology Finance Corporation covering the southeastern region.

The three institutions plan to build a comprehensive venture finance support system linking investment, lending and credit guarantees, aiming to provide multifaceted funding support throughout the growth cycle of venture companies, not just at the investment stage.

The launch event also featured research presentations on the startup ecosystem and venture investment landscape in the Daegu-North Gyeongsang region, along with panel discussions on strategies for growing the local venture investment ecosystem.

The fund's launch is also significant for pooling previously fragmented regional investment resources into a single vehicle to increase the scale of venture investment. Local governments, financial institutions, regional companies and universities across Daegu and North Gyeongsang Province have all participated as co-investors, raising hopes that the fund will help build a venture ecosystem spanning startup discovery, investment and growth support.

"The Daegu-North Gyeongsang Integrated Regional Growth Fund — the country's first integrated cross-regional mother fund — is a new attempt to connect the innovation capabilities of Daegu and North Gyeongsang Province across administrative boundaries," said First Vice Minister of the Ministry of SMEs and Startups Noh Yong-seok. "We will not only establish the fund but also build a cooperative framework between leading regional financial institutions and public venture finance bodies to create a sustainable local venture ecosystem."