[Image generated using ChatGPT]
[Image generated using ChatGPT]

South Korea's new venture investment in the first half of this year approached 9 trillion won ($6.36 billion), setting an all-time record for any first-half period, driven by a string of deals worth 100 billion won or more in semiconductors and robotics.

The Ministry of SMEs and Startups announced Wednesday that new venture investment totaled 8.87 trillion won in the first half of 2026, up 54.3 percent from the same period a year earlier. The figure surpasses the 7.64 trillion won recorded in the first half of 2022 — the previous peak during the venture investment boom — making it the largest first-half total on record.

New venture fund formation in the first half reached 8.44 trillion won, up 33.0 percent year on year, the second-highest first-half figure ever recorded.

By investor type, contributions from policy finance rose 58.3 percent and those from the private sector climbed 28.1 percent. Financial institutions were a particularly strong source of inflows: their commitments to venture funds reached 2.61 trillion won in the first half, up 54.9 percent from a year earlier. The surge was attributed in part to a government decision in March to cut the risk weighting applied to banks investing in policy-purpose venture funds from 400 percent to 100 percent.

By sector, information and communications technology services attracted the most investment at 1.86 trillion won, accounting for 21.0 percent of total venture investment. Electrical equipment, machinery and equipment came second at 1.54 trillion won (17.3 percent), followed by biotech and medical at 1.5 trillion won (17.0 percent).

According to the ministry, ICT services have drawn the most venture investment of any sector over the past five years. While platform-based services once dominated, investment has increasingly shifted toward AI-driven technology fields such as AI solutions.

ICT manufacturing posted the sharpest year-on-year gain, surging 143.3 percent. Electrical equipment, machinery and equipment rose 90.4 percent, and ICT services climbed 62.2 percent. Large deals of 100 billion won or more in AI semiconductors, memory chips and humanoid robots lifted investment across the semiconductor and robotics sectors.

Early-stage startups also drew significant capital. Investment in companies up to three years old reached 1.83 trillion won, up 56.4 percent from a year earlier, and the number of early-stage companies receiving investment grew 28.9 percent — from 499 in the first half of last year to 643 this year.

Deep tech startups in AI, semiconductors and robotics have increasingly won recognition for their technology and growth potential from the earliest stages, helping them secure large funding rounds. Sixteen early-stage companies each raised 100 billion won or more from venture capital firms and funds, collectively receiving 421.8 billion won. Nine of them, accounting for 315.3 billion won, were AI or robotics companies.

Regional investment growth was also notable. Investment by venture capital firms and funds in the Greater Seoul metropolitan area reached 3.1 trillion won, up 49.9 percent year on year, while investment in non-metropolitan areas jumped 104.7 percent to 1.06 trillion won.

Among non-metropolitan areas, Daejeon attracted the most investment at 435.9 billion won, buoyed by large deals in emerging industries such as life sciences and aerospace that drew on the research and development infrastructure of the Daedeok Innopolis. North Chungcheong Province saw investment surge 343.9 percent year on year to 101.2 billion won, driven by growth in biotech and fine chemicals centered on the Osong Life Science Complex.

The investment expansion is also translating into job creation. A ministry analysis of employment trends at startups that received venture investment over the past three years found that headcount grew more than 11 percent annually after funding. Workers in their 30s or younger accounted for roughly 60 percent of the jobs added following investment.

To sustain the momentum, the ministry plans to double the allocation to early-stage funds under the government's Fund of Funds program — from 100 billion won last year to 200 billion won this year — and to give preferential treatment to funds that commit a set minimum share of their capital to early-stage companies.

The government will also expand tax support for venture investment. It plans to extend the eligibility window for venture investment tax benefits from companies up to seven years old to those up to 10 years old, make permanent a capital gains tax exemption for shares held by venture capital firms, and raise the corporate tax credit rate for direct investment by domestic corporations in venture companies located in population-decline or population-decline-risk areas from 5 percent to 7 percent.

"Both venture investment and fund formation grew sharply in the first half of this year, signaling that the domestic venture investment market has entered a full-fledged growth phase," said Kim Bong-deok, the ministry's venture policy director. "We will pursue policy support — including tax incentives — to ensure that the expansion of venture investment drives not only the innovative growth of startups and venture companies but also youth job creation and regional economic revitalization."


boo@heraldcorp.com