An aerial view of Busan (Korea Tourism Organization)
Busan Metropolitan City said on Wednesday it plans to inject a total of 205.6 billion won ($174.4 million) this year to launch a new technology hub in South Korea’s second-largest city and back the startup ecosystem in line with the nationwide venture boom.
The fund is a combination of the state-budget of 82.7 billion won, 84.3 billion won from the private sector and the rest coming from Busan.
It is meant to finance early-stage startups to help them overcome the negative cash flow at its “death valley curve,” and to help startups in their later-stage of growth become unicorns -- with a valuation of over $1 billion.
The city is seeking to increase venture investment funds worth 430 billion won, from 373,3 billion won last year, in part by teaming up with international startup investors like Yozma and VisionFund. Moreover, Busan will extend some 30 billion won financial support to sectors including artificial intelligence, games, digital contents, virtual reality, augmented reality, blockchain and e-commerce.
The fund will also go to Busan’s six industrial clusters designated in December, new coworking spaces and training centers for entrepreneurs.
Busan, some 320 kilometers southeast of Seoul, has seen a fast pace of growth of the startup ecosystem over the past five years.
The number of institutions dedicated to startup incubation rose 2.5 times to 60, while the funds created to support startups rose fivefold from 2014.
By Son Ji-hyoung (email@example.com