South Korea Launches $430 Million Fund to Cultivate Homegrown AI Unicorns

South Korea has unveiled an ambitious new initiative to nurture artificial intelligence (AI) startups into unicorns, launching a ₩570 billion ($430 million) venture fund aimed at accelerating the country’s position in deep tech innovation.

On July 10, the Ministry of SMEs and Startups announced the second round of funding from the Korea Venture Investment Corp.’s parent fund, committing ₩310 billion ($234 million) to form a new series of funds under the “Next Unicorn Project.” This effort, introduced in the government’s second supplementary budget of the year, focuses on fostering AI and deep tech ventures through strategic, stage-specific investment—marking a shift from previous scattered funding models.

The initiative allocates ₩300 billion toward the formation of two core investment vehicles. The Startup Fund will provide early-stage capital for companies founded by AI and deep tech specialists, while the Scale-up Fund will support growth-stage firms, offering investments exceeding ₩10 billion per company.

A central component of the Scale-up Fund is its focus on firms designated within the “NEXT UNICORN Pool,” a curated list of high-potential ventures recommended by public agencies. These firms have already demonstrated success through participation in existing government programs, and the new funding seeks to build on that momentum by connecting early support with large-scale growth capital.

To further stimulate early-stage innovation, the ministry is also dedicating ₩10 billion to create a ₩16.7 billion micro-fund. This move targets startups struggling to secure seed funding amid a tighter investment climate.

Applications for fund management firms will be accepted through August 1. Selected managers will be announced in September, with priority given to those capable of deploying capital by year-end to expedite investment into the sector.

The Ministry of SMEs and Startups emphasized that this initiative reflects a strategic push to transform South Korea into a global AI powerhouse by scaling domestic deep tech capabilities through bold, coordinated investment.

This announcement can be found on the official Korean Government Policy Briefing Portal.

Image Credit: the Ministry of SMEs and Startups