Average commitment of new funds at 26.3 billion won, topping VC industry average

13 CVCs operating 85 investment funds as capital contributions grow

Corporate venture capital arms under general holding companies invested about 200 billion won ($130 million) in venture firms last year, according to data released Wednesday. Investment was concentrated in early- and growth-stage companies that typically struggle to secure financing, contributing to the vitalization of the venture ecosystem.

The Korea Fair Trade Commission's "2026 Status of Holding Companies and CVCs" report, released Wednesday, showed that CVCs affiliated with general holding companies numbered 13 as of the end of last year, down one from the previous year.

The Korea Fair Trade Commission building at the Government Complex Sejong in Eonjin-dong, Sejong [Newsis]
The Korea Fair Trade Commission building at the Government Complex Sejong in Eonjin-dong, Sejong [Newsis]

A CVC is a venture capital firm operated as a subsidiary of a corporation for the purpose of making venture investments.

Under current fair trade law, general holding companies are prohibited from owning financial subsidiaries in line with the principle of separating industrial and financial capital. However, since 2022, limited exceptions have been permitted, allowing general holding companies to own 100 percent of a CVC's shares provided the CVC engages solely in investment activities.

The 13 CVCs are currently operating a combined 85 investment funds. Last year, 15 new funds were established, up five from the previous year. Total committed capital for new funds reached 394.5 billion won, an increase of 61.5 billion won, and the average commitment per fund was 26.3 billion won — exceeding the domestic VC industry average of 16 billion won.

Of the 80.5 billion won actually paid into new funds, 52.5 billion won, or 65.2 percent, came from the corporate groups to which the CVCs belong. This represents internal corporate reserves flowing into the venture investment market through CVCs.

The 13 CVCs made a total of 151 investments worth 193.9 billion won last year. While this was down from 245.1 billion won the previous year, it was higher than the 176.4 billion won recorded in 2023. Overseas investments were also made, with four CVCs investing a combined 13.3 billion won abroad, accounting for 6.9 percent of total investment.

By company age, investment in early-stage firms less than three years old totaled 27.1 billion won, unchanged from the previous year, but its share of total investment rose 2.9 percentage points to 14.0 percent.

Mid-stage firms aged three to seven years received 77.7 billion won, up from 75.5 billion won the previous year, representing 40.1 percent of total investment. Combined investment in early- and mid-stage companies reached 104.8 billion won.

The Fair Trade Commission said CVCs are playing an important role as providers of risk capital, helping venture firms overcome the so-called "death valley" — a period of stagnation caused by funding shortfalls.

By sector, ICT services accounted for the largest share of investment at 24.9 percent, followed by biotech and medical at 23.3 percent and electrical, machinery and equipment at 23.2 percent.

Meanwhile, the total number of domestic holding companies stood at 173 as of the end of last year, down four from the previous year. Their subsidiaries, sub-subsidiaries and second-tier subsidiaries totaled 2,357 companies, with each holding company controlling an average of 13.9 affiliates.

Of the 102 corporate groups subject to disclosure requirements this year, 51 operate under a holding company structure. Samsung came to hold a holding company after establishing Samsung Epis Holdings through a spin-off of Samsung Biologics' biosimilar business division.

Shinsegae, by contrast, saw its existing holding company Emerald SPV dissolved after it was merged into E-mart. Joongang and Ecopro were also removed from the list of designated holding companies due to a decline in their holding ratios.

A total of 47 large corporate groups were found to have a holding company-centered governance structure. The average debt ratio of holding companies was 39.3 percent, well below the legal ceiling of 200 percent. Syracuse Mid Co. was the only exception, with a debt ratio of 235.7 percent, though it had fallen back below the legal limit as of the end of April this year.

The average equity stakes held by general holding companies in their subsidiaries and sub-subsidiaries were 73.7 percent and 84.5 percent, respectively. For listed companies, the figures were 42.0 percent and 46.1 percent, while for unlisted companies they were 87.0 percent and 86.8 percent — all exceeding the legally required minimums of 30 percent for listed companies and 50 percent for unlisted companies.


y2k@heraldcorp.com