Key Takeaways
- • Kim Hak-gyun, Chairman of the Korea Venture Capital Association (VC Association), proposed a 30 trillion won "KOSDAQ Activation Fund" to invest in new and existing shares of KOSDAQ-listed companies, according to MoneyToday.
- • Korean venture investment exceeded 10 trillion won annually, with new venture investments of 13.6 trillion won and fund formation of 14.3 trillion won last year, but exit routes remain narrow.
- • New KOSDAQ listings have stayed at roughly 80 per year over the past five years, versus a NASDAQ market that Kim says can accommodate far more companies in good conditions.
- • Secondary funds should act as a buffer in the near term, as large-scale funds formed since the 2010s begin reaching maturity en masse from 2028.
- • Kim opposed the planned KOSDAQ Section 1 and Section 2 restructuring, warning it could marginalize Section 2, where most new listings occur.
Summary
Kim Hak-gyun, Chairman of the Korea Venture Capital Association, argued that the exit market for Korean venture investments is too narrow to support the sector's growth, according to MoneyToday. He noted that venture investment has expanded to an annual scale above 10 trillion won. Citing the Ministry of SMEs and Startups, he said new venture investments reached 13.6 trillion won last year and fund formation totaled 14.3 trillion won. First-half venture investment this year reached 8.8676 trillion won, a first-half record. Against that backdrop, he said new KOSDAQ listings over the past five years have remained around 80 per year, while NASDAQ can accommodate far more companies in favorable markets.
Kim warned that unicorns valued above 1 trillion won, including Rebellions and Furiosa AI, are preparing for listings but that the market is not ready to absorb them. He cautioned that a decline in these large companies' share prices from their first trading day would affect later fundraising and follow-on listings. He attributed part of the problem to a shift in industrial structure: the fast-follower model, which relied on subsidiaries of large conglomerates and fit within eight-year fund maturities, has given way to deep-tech first movers whose growth takes longer, pushing companies to list before maturity. He also cited a shortage of investors willing to hold companies after listing, noting that institutional investors account for about 80% of NASDAQ trading and that post-listing investment exceeds venture investment.
To address this, Kim proposed the 30 trillion won KOSDAQ Activation Fund, which would invest in new and existing shares of KOSDAQ-listed companies. He said institutional ownership on KOSDAQ is only in the 6% range and that retail-driven short-term trading prevents companies from being nurtured. He called for tax incentives and regulatory relaxation, along with coordination among the Ministry of SMEs and Startups and the Financial Services Commission. He also proposed secondary funds as a near-term buffer to delay recovery timing while structural reforms proceed.
Kim expressed concern about the KOSDAQ Section 1 and Section 2 restructuring pursued by financial authorities, arguing that concentrating institutional capital in Section 1 could marginalize Section 2. He said the prerequisite for such reform is first improving the market's structure through the Activation Fund. He also disclosed that the association is promoting a cross-border fund investing in Korea and Taiwan, jointly managed by operators in both countries, to address overseas LP attraction, overseas investment, and overseas listings.
Kim warned that unicorns valued above 1 trillion won, including Rebellions and Furiosa AI, are preparing for listings but that the market is not ready to absorb them. He cautioned that a decline in these large companies' share prices from their first trading day would affect later fundraising and follow-on listings. He attributed part of the problem to a shift in industrial structure: the fast-follower model, which relied on subsidiaries of large conglomerates and fit within eight-year fund maturities, has given way to deep-tech first movers whose growth takes longer, pushing companies to list before maturity. He also cited a shortage of investors willing to hold companies after listing, noting that institutional investors account for about 80% of NASDAQ trading and that post-listing investment exceeds venture investment.
To address this, Kim proposed the 30 trillion won KOSDAQ Activation Fund, which would invest in new and existing shares of KOSDAQ-listed companies. He said institutional ownership on KOSDAQ is only in the 6% range and that retail-driven short-term trading prevents companies from being nurtured. He called for tax incentives and regulatory relaxation, along with coordination among the Ministry of SMEs and Startups and the Financial Services Commission. He also proposed secondary funds as a near-term buffer to delay recovery timing while structural reforms proceed.
Kim expressed concern about the KOSDAQ Section 1 and Section 2 restructuring pursued by financial authorities, arguing that concentrating institutional capital in Section 1 could marginalize Section 2. He said the prerequisite for such reform is first improving the market's structure through the Activation Fund. He also disclosed that the association is promoting a cross-border fund investing in Korea and Taiwan, jointly managed by operators in both countries, to address overseas LP attraction, overseas investment, and overseas listings.
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