3 billion won committed from mutual-growth fund, matched with private capital

Fund to target impact companies tackling social problems

Remaining 7 billion won to support SMEs in AI, green and safety transitions

KB Financial Group headquarters [KB Financial Group]
KB Financial Group headquarters [KB Financial Group]

KB Financial Group is setting up a fund to invest in "impact companies" — businesses that pursue both social problem-solving and financial returns — marking the first time a mutual-growth cooperation fund has been used as a source of venture capital.

KB Financial Group said Wednesday it had established a "mutual-growth mother fund" together with the Korea Foundation for Cooperation of Large & Small Business, Rural Affairs and Korea Venture Investment.

The fund was made possible by an amendment to the enforcement decree of the Mutual Growth Cooperation Act, which now allows mutual-growth funds to be channeled into venture investment. Of the 10 billion won ($7.36 million) KB Financial Group contributed to the mutual-growth fund, 3 billion won has been committed by the foundation to the mother fund, with Korea Venture Investment taking on management duties.

The group plans to raise additional private capital to create a child fund worth a total of 5 billion won. The child fund will focus on impact companies that set social problem-solving as a core business objective while also demonstrating growth potential and innovation.

KB Financial Group said it intends to supply growth capital to portfolio companies to strengthen their business competitiveness, building a structure in which corporate growth feeds back into the creation of social value.

"We hope this mother fund will become a model case of mutual growth that links philanthropy with investment, and serve as a catalyst that draws in more corporate participants," a KB Financial Group official said. "KB Financial Group will continue to provide unwavering support so that companies with strong capabilities can build competitiveness in the market and sustain their growth."

The remaining 7 billion won from the mutual-growth fund — after the 3 billion won allocated to the mother fund — will be used to strengthen the future competitiveness of small and medium-sized enterprises and small business owners. KB Financial Group earlier decided in June to contribute a total of 10 billion won to the mutual-growth fund together with the Ministry of SMEs and Startups and the foundation. The remaining resources are earmarked for support in AI transformation, green transformation and safety transformation.

Meanwhile, financial authorities plan to introduce a "mutual-growth finance index" to evaluate the mutual-growth activities of financial institutions. The Financial Supervisory Service and the Korea Commission for Corporate Partnership are set to release the results of a pilot evaluation covering six banks — KB Kookmin, IBK, NH NongHyup, Shinhan, Woori and Hana Bank — at the end of next month, with two top-performing banks to receive awards. Authorities are also pushing to formally operate the evaluation framework starting next year.


rim@heraldcorp.com