Start-ups to get $925 million of taxpayer money over 5 years

The Ministry of SMEs and Startups will commit more than 2 trillion won ($1.4 billion) over five years to support 1,000 promising startups in a bid to accelerate the growth of high-tech firms in areas including semiconductor, bio, cyber security...

Minister of SMEs and Startups Lee Young speaks during a briefing at the Seoul Center for Creative Economy & Innovation in Yongsan District, central Seoul, on Thursday. [MINISTRY OF SMES AND STARTUPS]

The Ministry of SMEs and Startups will commit more than 2 trillion won ($1.4 billion) over five years to support 1,000 promising startups in a bid to accelerate the growth of high-tech firms in areas including semiconductor, bio, cyber security, aerospace and health.

Of the 2 trillion won promised to startups, the ministry will raise 680 billion won from the private sector, and government will spend 1.32 trillion won, including 500 billion won for R&D.

The ministry announced the plan, entitled the Deep Tech 1000+ Startup Project, at the Seoul Center for Creative Economy & Innovation in Yongsan District, central Seoul, on Thursday. The initiative aims to nurture new startups across 10 areas to equip them with a competitive edge on the global stage.

In Korea, only three of the 23 unicorn companies as of the first half of this year are technology based, the other 20 unicorns being mostly platform based service providers that make use of existing technologies, according to SMEs minister Lee Young.

“The Deep Tech 1000+ Startup Project is aimed to nurture more technology based companies,” explained Lee. “As we turn to an ever more digital age, technology based startups are essential.”

The 10 areas are; semiconductors, bio and health, future mobility, green energy, robotics, big data and artificial intelligence, cyber security networks, aerospace and offshore engineering, next-generation nuclear power and quantum technology.

The SMEs ministry emphasized that this is the first time that the ministry is offering investment into startups by selecting specifically from different business areas. Methods for selection will be open recruitment, private and ministerial recommendation and private investment. Selected startups will receive specialized support in accordance to the method that they were chosen.

Each startup will receive on average 800 million won from the Deep Tech 1000+ Startup Project, according to the SMEs ministry. A startup could potentially receive up to 3.1 billion won.

The SMEs ministry also announced that it will establish a 110-billion-won fund for deep tech startups to promote private investment in promising new industries, and said that the current 6.3-trillion-won global fund aimed at attracting foreign investment will be raised to 8 trillion won by the end of next year.

Inter-ministerial cooperation and support were also promised. Mutual recommendation between relevant ministries for R&D projects will be encouraged. The SMEs ministry will work closely with the Ministry of Science and ICT on areas such as bio, future vehicles and big data.

“Startups are the engines of the future that will lead the national economy in years to come,” said SMEs minister Lee. “We will work towards creating startups that lead the global market by intensively investing the capabilities and means of the private and public sectors.”

Representatives from some of the leading startups in various industries were in attendance at the announcement of the Deep Tech 1000+ Startup Project, including AI semiconductor company Rebellions CEO Park Sung-hyun, bio and medical company Lamditech Executive Director Jang Chang-uk and auto parts startup Hubis CEO Kim Myung-jin.

BY LIM JEONG-WON [lim.jeongwon@joongang.co.kr]