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The government will establish a 'Korean-style Incubell' that directly invests in security sector startups, similar to the CIA's Incubell (IQT). Starting next year, it will raise a 50 billion won fund to invest in and support relevant startups. Additionally, it plans to create a defense fund exceeding 1 trillion won and establish a specialized operating company called 'Korea Strategic Technology Partners' to invest in mid-to-late stage security venture companies.
The Ministry of SMEs and Startups announced on the 3rd that it held the second meeting of the 'New Security Innovative Enterprise Promotion Working Group' with relevant ministries in Seoul, discussing these measures. This meeting was held as a follow-up to the 'Future New Security Innovative Enterprise Promotion Strategy Meeting' convened at Cheong Wa Dae last June, to review progress and collaborative tasks across ministries.
During the meeting, concrete plans for establishing a security-focused institutional investor, dubbed the Korean-style Incubell, were discussed. The Incubell is a non-profit venture capital firm established by the U.S. CIA in 1999 to invest in promising companies in security fields such as artificial intelligence (AI) and drones, supporting their growth. Palantir, an AI data company, is a representative portfolio company of IQT.
The Ministry of SMEs and Startups decided to establish a fund for the Korean-style Incubell to operate next year with a scale of 50 billion won. The fund will be created through equal contributions of 25 billion won each from the Ministry of SMEs and Startups and the Defense Acquisition Program Administration (DAPA). The government plans to continuously contribute to the fund over four years and reinvest all recovered funds entirely. The security-focused institutional investor managing the fund will be established as a subsidiary of Korea Venture Capital, with a budget allocation of 3.8 billion won for related expenses.
Additionally, it was decided to create a defense fund totaling 1 trillion won by 2030. This is a fund jointly established by policy funds such as Fund of Funds (Korea Venture Fund) and private capital. The Fund of Funds (Korea Venture Fund) will contribute 500 billion won for the 'Defense Startup Fund', R&D deposits for defense research and development (R&D) will contribute 310 billion won for the 'Defense Technology Innovation Fund', and other DAPA resources will fund a 160 billion won 'K-Defense Export Fund'.
Park Yong-soon, Minister of SMEs and Startups, stated, "The Korean-style Incubell will identify which companies are needed in Korea's security environment, discover relevant enterprises at an early stage, and invest in them." He added, "As these companies grow, they will receive investment through a 1 trillion won defense policy fund and scale up."
Led by the Financial Services Commission, a specialized operating company called 'Korea Strategic Technology Partners' will also be established to support the later-stage growth of security companies. This institutional investor will handle R&D, commercialization, and related mergers and acquisitions (M&A) in future foundational technologies and core technologies for key industrial components and materials. The plan is to invest up to 10 trillion won over the next five years. Minister Park explained, "In terms of scale, it will manage a larger amount than defense policy funds and provide support on a larger unit."
Meanwhile, the meeting also continued discussions on plans to identify outstanding new security innovative enterprises, expand opportunities for military validation, and propose amendments or enactments of three laws related to new security. The Ministry of SMEs and Startups plans to concretize the support system for new security innovative enterprises in Jeonju based on this meeting's discussions.
Minister Park said, "To secure future new security competitiveness, it is crucial to quickly discover and invest in private sector innovative technologies and connect them so they can be utilized in actual defense and security fields." He added, "Together with relevant ministries, we will build an ecosystem to enable domestic small and medium-sized venture companies to grow into core enterprises leading the future of new security."
[MoneyToday Startup Media Platform Unicorn Factory]
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