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Impact investment firm and accelerator (AC) MY Social Company (MYSC) is becoming the first in the industry to adopt a holding company structure, establishing five subsidiary ACs under its umbrella. The subsidiaries will be specialized ACs focused on non-capital regions, with the aim of closely identifying and nurturing local startups.
According to relevant industry sources on the 28th, MYSC has recently completed the establishment of four internal ventures and is currently operating them internally. These internal ventures are expected to transition into region-specific ACs based in non-capital areas in the future, focusing on discovering and nurturing local startups. Given the limitations in discovering local startups from the capital area, the strategy is to establish bases locally to discover and nurture startups.
The potential hub locations under review include the southeastern region (Busan, Ulsan, and Gyeongnam) and the southwestern region (Jeonnam, Jeonbuk, and Gwangju). In the medium to long term, plans are also being considered to relocate the headquarters from Seoul to a regional area. The fifth legal entity, to be established under a holding company structure, is expected to take the form of a global joint venture (JV) in collaboration with European venture studios. Through this initiative, startups identified by regional ACs will be able to use the JV as a foothold for expanding into Asian and European markets.
MYSC plans to establish ACs in up to eight major regional zones across the country, including the capital region, Chungcheong, Honam, and Yeongnam (at the provincial level), over the medium to long term, and will also work on identifying and nurturing startups tailored to local industrial characteristics. In addition, it intends to strengthen its investment functions, including the establishment of venture capital firms (VCs). While current regulations prohibit ACs from having VCs as subsidiaries, such a structure is permissible under a holding company framework.
Kim Jeong-tae, CEO of MYSC, said, "As industrial structures and startup environments vary by region, an internal consensus has been reached that specialized incubation models tailored to each region are necessary," adding, "We will discover and nurture hidden startups in each region through our subsidiary AC."
Government goes all out to revitalize regional startups... Private ACs' role in focus
As MYSC pushes to establish region-specific ACs under a holding company structure, attention is focused on whether such initiatives will spread across the industry. If AC expansion into non-capital regions gains momentum, it is expected that the chronic issue of concentration in the capital area within South Korea's startup ecosystem could be somewhat alleviated, working in tandem with the government's policy to revitalize regional entrepreneurship.
According to the Venture Company Association, as of 2024, only 33.3% of domestic venture and startup companies were headquartered outside the capital region. The gap between the capital region and local areas continues to widen. To address this concentration in the capital region, the government is preparing various policies, including establishing a "regional quota system" for venture investment and R&D (research and development) support programs for startups starting this year. On the 26th, the Ministry of SMEs and Startups mandated that self-funds established through capital contributions from the fund of funds (Korea Venture Fund) under its jurisdiction must invest at least 20% of their total committed amount in regional startups. This marks the first time that the fund of funds (Korea Venture Fund) has required self-funds to invest in regional startups.
TIPS, which provides up to 800 million won in R&D grants, plans to recruit 620 new companies this year through its new support program and has decided to prioritize regional enterprises for at least 310 of them, accounting for 50% of the total. In particular, the TIPS support project requires a recommendation from an AC (Accelerator Center), highlighting the critical role of region-based ACs. ACs serve as key infrastructure that connects local startups not only to investment opportunities but also to government support policies.
In the industry, it is expected that if ACs expand into non-metropolitan areas, the venture investment market, particularly early-stage investment, which is inferior to that of the metropolitan area, will improve. This is because ACs are the main entities responsible for early-stage investment in Korea's startup ecosystem. A representative from a Gwangju startup support institutional investor said, "The infrastructure of the non-metropolitan startup ecosystem is extremely inferior to that of the metropolitan area in all aspects," and added, "We expect the local startup ecosystem to become more vibrant as ACs with expertise and know-how in incubation and investment increase their regional activities."
MYSC is also actively considering utilizing the venture studio system, which directly 'creates startups,' to foster various startups in the region. Through this initiative, the company plans to bring early-stage investment forward. Kim Jeong-tae (CEO) stated, "There are many opportunities to discover promising startups even in the region," and added, "Moving forward, as a private investor, we will collaborate with the government and national Creative Economy Innovation Centers across the country to uncover and nurture hidden startups in each region."
[Money Today Startup Media Platform Unicorn Factory]
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