Korea VC Chief Proposes 30 Trillion Won Fund to Fix KOSDAQ

By Grace Kim

Korea's venture capitalists poured a record 8.87 trillion won into startups in the first half of this year, yet the country's main exit market keeps listing only 80 to 100 companies annually. Kim Hak-gyun, Chairman of the Korea Venture Capital Association, calls that mismatch the core problem of the Korean venture ecosystem — and he has put a 30 trillion won fix on the table.

Kim wants a "KOSDAQ Activation Fund" of that size, investing in both new shares and old shares held by existing shareholders of KOSDAQ-listed companies. His reasoning is blunt: institutional investors hold only about 6% of KOSDAQ, while short-term retail trading dominates.

"This structure cannot nurture companies," Kim said. "Expanding the scale of the KOSDAQ market is a top priority, and it must be supported by tax incentives and regulatory relaxation."

Why can't record investment find exits?

The numbers tell the story. According to the Ministry of SMEs and Startups, new venture investments reached 13.6 trillion won last year and venture fund formation totaled 14.3 trillion won. First-half investment this year hit 8.8676 trillion won, a record for the period.

The exit side hasn't moved. Kim said new KOSDAQ listings, excluding SPACs, have stayed at roughly 80 to 100 per year for the past five years, with public offering amounts stuck between 2.4 trillion and 3 trillion won.

"NASDAQ can accommodate far more companies when the market is good, but our vessel itself is small," Kim said.

In the US, the contrast is structural. Institutional investors account for about 80% of NASDAQ, and post-listing investment amounts there exceed venture investments, according to Kim.

"Even for companies that listed before generating profits, someone must take the baton and help them grow, but that part is missing in our market," he said.

What happens to unicorns like Rebellions and Furiosa AI?

Kim said unicorn startups valued above 1 trillion won are preparing listings, but the market isn't ready to receive them. He named two AI chip designers directly.

"Foundations must be established so that companies like Rebellions and Furiosa AI can raise funds in the market even after listing and advance toward becoming global enterprises," Kim said. "If the stock prices of such large companies drop from their first day of listing, not only will subsequent fundraising be affected, but companies preparing for follow-on listings will inevitably be impacted as well."

The industrial structure has changed too, he argued. The old fast-follower model — investing in conglomerate subsidiaries — fit the 8-year maturity of venture funds. Today's deep-tech companies must act as first movers and take longer to grow, so more of them list before fully maturing inside a fund's lifespan.

Why 2028 is the deadline

Kim sees a second pressure point: the large funds formed since the 2010s start maturing en masse from 2028. His near-term answer is secondary funds — vehicles that buy existing fund shares or held stocks — to delay recovery timing and buy time while Korea pursues fundamental fixes to the exit structure.

He also warned against the KOSDAQ Section 1 and Section 2 restructuring pushed by financial authorities. If institutional money concentrates in Section 1, he said, Section 2 — where most new listings cluster — gets squeezed out.

"Dividing the market will intensify hierarchy, potentially relegating Section 2 to a marginalized market," Kim said. "The prerequisite for such structural reform is improving the market's constitution through the KOSDAQ Activation Fund."

He called on the Ministry of SMEs and Startups and the Financial Services Commission to "link organically and move together" rather than treat unlisted and listed markets as separate files.

What's next on the global front?

Beyond KOSDAQ, Kim disclosed the association is promoting a "cross-border fund" with Taiwan: funds investing in both Korean and Taiwanese companies, jointly managed by operators from both countries. The structure would address overseas LP attraction, overseas investment and overseas listings in one vehicle.

"The association will take the lead in supporting efforts so that young people can dive into entrepreneurship without hesitation and expand into the world," Kim said.

Kim was elected the association's 16th chairman in February 2025 in its first-ever competitive election, after careers at LG Venture Investment (now LB Investment), Hanwha Investment and his current post leading Quantum Ventures Korea.

Whether Seoul acts before the 2028 maturity wave arrives will decide if this year's record investment ever finds its way back to investors.