Venture capital raised in 2021 hit record 9.2 trillion won

Funds raised by venture capital in Korea totaled 9.2 trillion won ($7.7 billion) last year, exceeding 9 trillion won for the first time.

According to the Ministry of SMEs and Startups on Monday, total investment raised by venture partnerships and the number of newly-established funds both significantly grew in 2021.

The amount of money raised grew by 34 percent from 6.9 trillion won in 2020 to 9.2 trillion won, while the number of newly-established funds almost doubled from 206 in 2020 to 404 in 2021 — both records. Of the 9.2 trillion won, 3.9 trillion won was raised during the fourth quarter of 2021, the highest amount for a single quarter.

The average raised per fund was 22.8 billion won, 31.7 percent lower than the 33.4-billion-won average of 2020 due to the increase in the number of funds.

The number of small-sized funds, with less than 10 billion won, also grew last year. There were 172 new small-sized funds, from such 62 funds in the year prior.

Over half, or 58.1 percent, of small-sized funds were raised by venture capitalists and limited-liability companies founded in the past three years.

They have been playing "an active part in raising small-sized funds," according to the ministry, which was possible as regulations have been eased since 2017. The capital needed for a venture capital firm was lowered from 5 billion won to 2 billion won by the ministry. The Venture Investment Promotion Act was established in February 2020.

Eleven funds managed by accelerators were formed in 2020 and that number jumped to 41 in 2021.

There were 21 ventures funds with over 100 billion won, and they had a total of 3.57 trillion won of funding.

Private investments rose by 2 trillion won last year, while "fund of funds" decreased from 18.2 percent of the total to 17.3 percent.

"Breaking 9 trillion won in venture funds beats our expectations," said the ministry in a press release. "It is meaningful that eased regulations have led to increased venture investor activity and private funds."

BY KANG KI-HEON, YOON SO-YEON [yoon.soyeon@joongang.co.kr]