Seoul city gov't announces expanded vision for startup funding

Seoul Metropolitan Government, through “Seoul Vision 2030 Fund,” has begun searching for startups so that those with high potential can be subsidized by the city's new mega-fund. Gettyimagesbank

By Ko Dong-hwan

In 2019 the Seoul Metropolitan Government pooled a huge four year-investment fund for the city's promising startups. As a follow-up, the authority has now launched a mega-funding project to support prospective firms amid the harsh financial conditions right now.

The Economic Policy Office under the city government announced Monday they started pooling money for the “Seoul Vision 2030 Fund” with the goal of securing 5 trillion won ($3.8 billion). To be allocated over the next four years, starting this year, the fund will subsidize the startups in six different categories, including open-innovation, transformation to complete digitalization, development of cultural contents and 'Seoul bio fund' for firms in the digital healthcare industry.

The city government's latest funding project for local startups represents the authority's “sustainable support” for fledgling companies with promising futures in the competitive global market, according to the Economic and Policy Office. The previous funding project from 2019 to 2022, the authority said, rather “laid out a foundation” for the firms to enter the global market in the beginning stage of their businesses.

The massive funding project ― the largest in size among the country's municipal governments, according to the city government ― has different schedules and goals for each of the six stages. The projected funding goals include 1.4 trillion won for “open-innovation, or scale-up” fund for high-potential firms possessing patented technologies, 250 billion won for companies with goals of resolving public problems but that have insufficient funding, 1 trillion won for a “digital transformation” fund, and 1 trillion won for firms with experience or technologies that have been forced to shut down.

The city government, with 350 billion won from the city coffer, plans to build up the 5 trillion won budget with government funds and private investment funds.

“With the latest funding, Seoul startups in future-bright industries such as AI, bio, fintech and creative contents will be invested in by the city government more aggressively,” Seoul Mayor Oh Se-hoon said, Monday.

“Seoul Startup Hub Scale-up Center, our city government's brand-new agency, has also opened to speed up this kind of large-scale government investment. These efforts are to support our city's promising startups so that they can overcome the ongoing global economic downturns, get subsidized and build themselves up to the point of ushering the city into new industries we can feed on for the next centuries.”

The latest funding project has been motivated by its predecessor, the Seoul Future Innovation Growth Fund, which has proven successful. It collected a total investment of 3.4 trillion won from 60 fund cooperatives, a figure surpassing the project's original goal of 1.2 trillion by 283 percent.

Invested in by 470 firms, the startups that benefited from the 2019-22 funding project have produced a total net growth by 1.28 trillion won and created more than 8,200 new jobs. The funding pool also helped the companies pick up momentum despite challenges stemming from COVID-19, the Russia's invasion of Ukraine and the difficult global financial conditions.

With the Seoul Future Innovation Growth Fund, Startup Genome, a global assessment agency for startup environments, ranked Seoul 10th among 280 cities in the world in June 2022. The city ranked first in Asia under the category of “government subsidy.”

Companies interested in the Seoul Vision 2030 Fund can file an application starting Monday. Those passing the first round will undergo final in-person interviews in June.

The Seoul Metropolitan Government's latest funding project follows the slashing of investments in the country's startups from late last year. This year's first quarter saw venture investment funds in the city drop by more than 60 percent compared to the previous year.