“Domestic start-ups and venture companies have fewer opportunities to receive investment than American companies. Suwon City has established the ‘Suwon Enterprise New Light Fund’ to create a virtuous cycle in which start-ups receive investment and grow.”
Lee Jae-jun, the mayor of Suwon, Gyeonggi Province, who went on a business trip to the ‘World Consumer Electronics Show (CES) 2024’ last month, helped companies secure contracts worth over 7 billion won. Here, this market experienced the reality that investment is the only lifeline for companies.
In January last year, Mayor Lee proposed a plan to create a 100 billion won Saebit Fund with the goal of fostering Suwon City’s first unicorn company (start-up company with a corporate value of over 1 trillion won) and 300 start-ups. This fund, which seeks to create a virtuous cycle through investment in startup companies, secured an investment of 305.8 billion won, more than three times its target amount, early this month.
According to Suwon City on the 13th, Saebit Fund’s ‘experiment’, which was revealed in January last year, is attracting attention both inside and outside the country.
Saebit Fund is a fund that invests in the growth of start-ups, ventures, and small and medium-sized businesses that have excellent technology and growth potential but lack funds.
When a company selects a fund combination, consults with the manager, and submits corporate promotional (IR) materials, the manager conducts an investment review and decides whether to invest. The city plans to use this as a catalyst to create a ‘complete investment ecosystem’ in which early start-ups can grow into unicorn companies.
The fund is divided into five areas for investment, including the so-called ‘materials, parts, and equipment’, bio, and the 4th industry. This is an expansion of the concept of an angel fund that mainly invests in individual venture companies.
Five management companies, including Aju IB Investment (KRW 100 billion) in the 4th industrial sector such as artificial intelligence, Kolon Investment (KRW 73 billion) in the small and medium-sized accounting field, and Laguna Investment (KRW 50 billion) in charge of early investment in startups, have already collected a significant amount of investment. .
The city enters into an investment agreement with the management company, prepares the framework for the fund, and then helps experts discover investment companies. It is entirely up to the management and investment company to decide which company to invest in based on business feasibility.
It has been agreed that more than twice the investment must be invested in Suwon companies, so it is expected that there will be a lot of investment in companies in the area. The city expects to create jobs for about 2,100 people and induce production worth 447 billion won.
Ha Jeong-geun, team leader of the Suwon City Corporate Policy Task Force (TF), said, “The first investment target company will be announced soon.” He added, “From the city’s perspective, after creating a large-scale playground, companies will grow, creating more jobs, money flowing into the local economy, and increasing tax revenue.” “I hope it will be effective,” he explained.
Previously, Mayor Lee declared attracting 30 companies as his first pledge as part of his inauguration, saying, “First and second is the economy.” He said, “Qualitative aspects are important when it comes to attracting companies and investing,” and added, “We try to help companies with a long-term perspective. “We will create a virtuous cycle business ecosystem,” he pledged.
Meanwhile, Gyeonggi Province and Gyeonggi Province Corporation are recruiting companies to participate in the ‘2024 Small Business Marketing Support Project’ until the 28th of this month. This project recruits 680 companies in the online and offline marketing support business sector and 250 companies in online store sales management. In addition, a project is being promoted to help 30 companies advance into home shopping by supporting broadcasting transmission fees of up to 15 million won per company.
Suwon = Reporter Oh Sang-do [email protected]
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