South Korea’s MSS and FSS formalise a landmark alliance to deepen institutional investment in startups, aiming to position the country among the world’s top venture economies and foster a sustainable innovation ecosystem.
South Korea is making a significant strategic push to deepen the integration of finance with its burgeoning innovation sector, particularly through venture investment. On November 28, 2025, the Ministry of SMEs and Startups (MSS) and the Financial Supervisory Service (FSS) formalised a pioneering alliance by signing a memorandum of understanding titled “Promotion of the Adventure-Capital Ecosystem and Mutual Finance.” This landmark agreement, executed at the FSS headquarters in Yeouido, Seoul, indicates Seoul’s firm commitment to fostering an environment where institutional capital, including pensions and retirement funds, can flow more freely and prudently into startups and small and medium-sized enterprises (SMEs) engaged in innovative technology sectors.
The collaboration aims to break down barriers that have traditionally limited financial institutions’ venture investments, such as restrictive prudential regulations and risk-weighting rules that hamper participation in higher-risk, higher-reward opportunities. Both agencies will work closely to relax these constraints while simultaneously upgrading supervisory frameworks to protect investors and investee companies. A key part of the plan includes enhanced data-sharing protocols between the Korea Technology Finance Corporation (KIBO) and venture capital firms, facilitating better identification of promising SMEs and improving coordination for follow-on investments and financing.
Minister Han Seong-sook, speaking at the signing ceremony, positioned venture capital as a vital driver of South Korea’s economic renewal. She stressed the importance of ensuring “sufficient growth capital” for ventures, enabling them to scale into unicorns and decacorns, particularly in AI and deep technology sectors. Han highlighted the government’s ambition to elevate Korea into the ranks of the world’s top four venture economies, with an annual venture investment market target of KRW 40 trillion.
Complementing this, Governor Lee Chan-jin of the Financial Supervisory Service emphasised the need for a robust, disciplined financial infrastructure that supports the complete lifecycle of ventures, from early investment to sustainable returns and fund recovery. He outlined the agency’s commitment to building a provision framework that channels capital to sectors where innovation-based productivity can flourish, thus striking a balance between opportunity and risk management.
The alliance aligns with a broader policy shift toward what Korea terms “productive finance,” a framework aimed at directing national capital from traditionally low-yield asset markets into innovation-driven ventures. One of the initiatives under consideration is the introduction of the Mutual Finance Index by 2026. This metric is expected to gauge how financial institutions contribute to the co-growth of SMEs through inclusive lending and partnerships, signalling a more strategic approach to venture capital that goes beyond mere funding to fostering mutual prosperity.
Industry voices at the event expressed guarded optimism, calling for complementary measures to amplify the alliance’s impact. Kim Young-sung, CEO of KB Asset Management, called for tax incentives targeted at long-term venture investment vehicles such as Business Development Companies (BDCs) and funds, mechanisms designed to reassure and attract patient investor capital. Seo Jung-hak, CEO of IBK Investment & Securities, noted the critical role that mid-tier securities firms could play in filling financing gaps that larger institutions may overlook, especially in SME-focused financial services.
This regulatory and financial coordination between MSS and FSS is underscored by substantial government-backed venture capital commitments. Earlier in 2025, the MSS earmarked KRW 1 trillion from the Korea Fund of Funds to generate a venture fund exceeding KRW 1.9 trillion, alongside a record KRW 180 billion allocation to a “Global Fund” designed to support domestic startups in attracting overseas investment. This resonates with other MSS strategies, such as plans to establish a global investment attraction mother fund (K-VCC) in Singapore and efforts to enhance foreign investment convenience through centralized reporting centres.
Further reflecting Korea’s aspirations for international venture ecosystem integration, the Ministry has also forged cooperation agreements with countries such as Saudi Arabia and launched a $200 million global fund in partnership with major U.S. venture capital firms. These efforts aim to facilitate Korean startups’ entry into global markets, especially the U.S., and promote cross-border venture collaboration in deep-tech domains.
Taken together, the MSS-FSS alliance embodies South Korea’s strategic recalibration of its financial and regulatory architecture to nurture a world-class venture economy. By fostering a systemic linkage between institutional capital and innovative enterprises, while embedding investor protections and risk discipline, South Korea aims to sustain a virtuous cycle of venture investment, growth, and reinvestment. If successfully implemented, this model could position Korea as a leading example in Asia of how regulatory oversight and private-sector venture funding can coalesce to drive sustainable innovation-led economic expansion.
- https://koreatechdesk.com/korea-mss-fss-alliance-venture-investment-growth – Please view link – unable to able to access data
- https://cm.asiae.co.kr/en/article/2025112809465847059 – On November 28, 2025, the Ministry of SMEs and Startups (MSS) and the Financial Supervisory Service (FSS) signed a Financial Business Agreement to promote the venture capital ecosystem and foster mutually beneficial finance. The agreement aims to bridge the gap between the financial market and innovative small and medium-sized enterprises (SMEs) and venture businesses. Both organizations plan to discuss measures to improve prudential regulations, such as risk weightings, that restrict venture investment by financial institutions, and address financing challenges faced by SMEs and venture corporations. They will also collaborate to invigorate co-prosperity growth loans. Minister Han Seong-sook emphasized the importance of providing sufficient growth capital to help Korean ventures become global leaders in AI and deep tech. Governor Lee Chan-jin highlighted the need for a system that supplies and recovers funds at each stage of a company’s growth, ensuring timely support for venture capital policies. ([cm.asiae.co.kr](https://cm.asiae.co.kr/en/article/2025112809465847059?utm_source=openai))
- https://cm.asiae.co.kr/en/article/2024093020372208669 – The Ministry of SMEs and Startups (MSS) plans to grow the domestic venture investment market to a record high of 16 trillion won by 2027. To achieve this, the MSS intends to establish a global investment attraction mother fund (K-VCC) in Singapore, aiming to raise a fund of 200 million USD by 2027. The K-VCC will serve as a platform to support domestic venture capital firms in establishing global funds at low costs and attracting global investments. Additionally, the MSS plans to strengthen incentives to attract world-class venture capital firms to Korea and open a ‘Global Venture Investment Integrated Reporting Center’ for foreign investors to enhance convenience in foreign exchange transactions during the investment process. ([cm.asiae.co.kr](https://cm.asiae.co.kr/en/article/2024093020372208669?utm_source=openai))
- https://koreatechdesk.com/korea-mss-fss-alliance-venture-investment-growth – On November 28, 2025, the Ministry of SMEs and Startups (MSS) and the Financial Supervisory Service (FSS) signed a memorandum of understanding titled ‘Promotion of the Adventure-Capital Ecosystem and Mutual Finance’ at the FSS headquarters in Yeouido, Seoul. The agreement aims to enhance cooperation between financial markets and innovative SMEs and startups. The initiative focuses on improving prudential regulations, such as risk-weighting rules that limit financial institutions’ participation in venture investment, and easing financing challenges that restrict SME access to capital. Both agencies plan to explore strategies for pension and retirement funds to achieve stable returns while participating in Korea’s venture economy. They will also strengthen supervision to protect investors and investee companies and build systems for data sharing between the Korea Technology Finance Corporation (KIBO) and venture capital firms. ([koreatechdesk.com](https://koreatechdesk.com/korea-mss-fss-alliance-venture-investment-growth?utm_source=openai))
- https://cm.asiae.co.kr/en/article/2025012214551347571 – The Ministry of SMEs and Startups (MSS) has committed 1 trillion KRW from the Korea Fund of Funds to create a total venture fund worth 1.9 trillion KRW. This announcement represents the full 1 trillion KRW budget allocation for the Korea Fund of Funds in 2025, reflecting the government’s intention to provide early seed money to support the recovery of venture investments and encourage active investment. The MSS plans to invest a record-high 180 billion KRW in the ‘Global Fund,’ which supports domestic startups in attracting overseas investments, aiming to create a fund exceeding 1 trillion KRW. ([cm.asiae.co.kr](https://cm.asiae.co.kr/en/article/2025012214551347571?utm_source=openai))
- https://www.asiae.co.kr/en/article/2025092615575898622 – The Ministry of SMEs and Startups (MSS) and the Ministry of Investment of Saudi Arabia have agreed to strengthen cooperation in the SME and venture sector. The two sides shared achievements in cooperation and explored directions for future development, focusing on sustainable cooperation measures in the field of SMEs and startups. They agreed on the importance of not only startup exchanges but also technology-based entrepreneurship and investment cooperation, and explored various measures to promote these areas. The collaboration aims to establish Korea and Saudi Arabia as partners leading the global startup ecosystem together. ([asiae.co.kr](https://www.asiae.co.kr/en/article/2025092615575898622?utm_source=openai))
- https://www.koreatechdesk.com/south-korea-strengthens-u-s-market-access-for-startups-with-200m-global-fund-strategic-partnerships – The Ministry of SMEs and Startups of South Korea has launched a $200 million global fund to support Korean deep tech startups. The fund is backed by three prominent U.S. venture capital firms—Patron Management, Third Prime Capital, and ACVC Partners. The initiative aims to strengthen cross-border investment and cooperation between Korean and American startups. The United Korean Founders (UKF)–Korea Venture Investment MOU outlines joint efforts to accelerate the entry of Korean ventures into the U.S. and foster collaboration between Korean and American investors. The Ministry also announced plans to integrate this initiative with the K-Global Star Program, further leveraging the UKF summit as a launchpad for Korean startups seeking U.S. market access. ([koreatechdesk.com](https://www.koreatechdesk.com/south-korea-strengthens-u-s-market-access-for-startups-with-200m-global-fund-strategic-partnerships?utm_source=openai))
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The narrative was published on December 1, 2025, with the earliest known publication date of November 28, 2025. The report is based on a press release from the Ministry of SMEs and Startups (MSS) and the Financial Supervisory Service (FSS), which typically warrants a high freshness score. No discrepancies in figures, dates, or quotes were found. The content appears original, with no evidence of being republished across low-quality sites or clickbait networks. The inclusion of updated data alongside older material suggests a higher freshness score but should be noted.
Quotes check
Score:
9
Notes:
Direct quotes from Minister Han Seong-sook and Governor Lee Chan-jin were found in the report. No identical quotes appear in earlier material, indicating potentially original or exclusive content. The wording of the quotes matches the original press release, with no variations noted.
Source reliability
Score:
10
Notes:
The narrative originates from a reputable organisation, the Ministry of SMEs and Startups (MSS) and the Financial Supervisory Service (FSS), which adds credibility to the report. The entities mentioned in the report, including KIBO and the Korea Technology Finance Corporation, are verifiable and have a public presence.
Plausability check
Score:
9
Notes:
The claims made in the report align with recent developments in South Korea’s venture capital ecosystem, including the establishment of a $200 million global fund in Silicon Valley and the signing of a $350 billion strategic investment MOU with the United States. The language and tone are consistent with official communications from government agencies. The report includes specific factual anchors, such as dates, names, and institutions, enhancing its credibility.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative is fresh, original, and originates from reputable sources. The quotes are consistent with the original press release, and the claims made are plausible and supported by recent developments. No significant credibility risks were identified.