KB Financial's 3 Billion Won Seeds Korea's First Corporate Partnership Fund of Funds

Korea Venture Investment Corp. has formed the country's first fund of funds that channels cooperation money from large companies, state-run firms and financial groups into venture companies and startups, the state-backed investor said on September 30.

The vehicle draws on a donation from KB Financial Group, which contributed 3 billion won to a win-win cooperation fund managed by the Korea Foundation for Cooperation of Large & Small Business, Rural Affairs. The foundation then invested that money into the fund of funds operated by Korea Venture Investment, creating a new pipeline from corporate contributions to early-stage capital.

Korea Venture Investment plans to raise sub-funds totaling at least 5 billion won through the vehicle. Those sub-funds will target impact companies — ventures that pursue financial returns and solutions to social problems at the same time, while offering innovation and growth potential.

A regulatory unlock

The fund exists because of a revision to the enforcement decree of the law on cooperation between large companies and smaller firms. The revision allowed money held in corporate partnership funds to be invested in venture capital partnerships. That change created a channel for contributing companies — including large corporations, state-owned enterprises and financial groups — to invest in small and venture businesses through their contributions.

Before the revision, cooperation funds sat outside the venture capital system. Now they can move through a professional fund-of-funds manager with a mandate to back startups.

Korea Venture Investment frames the goal in structural terms. The company says it wants to build a virtuous cycle of cooperation that promotes technology partnerships and narrows wage gaps, while helping venture companies and startups raise growth capital.

The KB Financial anchor

KB Financial Group's 3 billion won donation is the seed for the first fund. The money was contributed to a win-win cooperation fund managed by the Korea Foundation for Cooperation of Large & Small Business, Rural Affairs, an organization set up to support investment in companies that generate social value. The foundation passed the money to Korea Venture Investment's fund of funds.

That routing matters. The contribution did not go directly into venture deals. It moved through the cooperation foundation and then into a state-operated fund of funds, which will deploy it via sub-funds raised under the new vehicle.

The structure gives Korea Venture Investment discretion over how the capital reaches the market. Sub-funds of at least 5 billion won in total will channel money to impact companies, which the fund's mandate defines as businesses pursuing both financial returns and solutions to social problems.

What the CEO said

Korea Venture Investment Chief Executive Lee Dae-hee positioned the vehicle as connective infrastructure for Korean venture capital.

"Through this fund of funds, we will serve as a bridge so that contributions from large companies and others flow smoothly into the venture investment ecosystem," Lee said. "Korea Venture Investment will further strengthen its role as a venture investment platform."

The statement signals the company's ambition to expand beyond its existing role as a state-backed venture investor. Lee's language — "bridge" and "venture investment platform" — describes a positioning between corporate contributors and the startup ecosystem, rather than a one-off fund launch.

Why it matters

The first fund is small. At least 5 billion won in sub-funds, seeded by a 3 billion won contribution, will not move Korea's venture market on its own. But the mechanism behind it is new, and it is now proven to work end to end: a financial group's cooperation contribution has moved through a state foundation into a professionally managed fund of funds targeting impact companies.

If other large corporations, state-owned enterprises and financial groups follow KB Financial Group's path, the regulatory change could open a recurring source of venture capital from money that previously stayed within the corporate cooperation system. Korea Venture Investment, as the operator of the vehicle, would sit at the center of that flow.