Key Takeaways
- • South Korea's five largest financial groups (KB, Shinhan, Hana, Woori, and NH NongHyup) have committed to supplying more than 1 trillion won ($730 million) in venture capital to domestic startups and venture firms through a formal government-backed partnership signed in May 2026.
- • The financial groups will establish an 800 billion won private venture fund of funds by 2029, with initial deployment of 400 billion won this year, supplemented by direct loans and indirect fund investments to accelerate venture financing.
- • Hana Financial Group will lead the expansion effort, contributing 100 billion won annually (400 billion won total) to the private venture fund of funds, while KB, Shinhan, and Woori will jointly establish a 100 billion won limited partner growth fund alongside the main vehicle.
- • Korean brokerages raised 57 trillion won ($39 billion) in Q1 2026 through investment management accounts (IMAs) and notes, positioning brokerage units as increasingly critical profit engines for financial groups, with combined net profits reaching 1.23 trillion won ($836 million).
- • The partnership, formalized through a memorandum of understanding between the Ministry of SMEs and Startups and the Financial Services Commission, aims to shift toward "productive finance" by leveraging the capital and capabilities of major financial groups to strengthen the venture and startup ecosystem.
Summary
South Korea's five largest financial holding groups have formally committed to injecting more than 1 trillion won in growth capital into the domestic venture and startup ecosystem under a government-coordinated initiative. KB Financial Group, Shinhan Financial Group, Hana Financial Group, Woori Financial Group, and NH NongHyup signed a memorandum of understanding in May 2026 with the Ministry of SMEs and Startups and the Financial Services Commission, titled "Partnership for Venture Investment Activation, the Startup for All Project, and the Productive Finance Transformation." The agreement represents a coordinated effort to strengthen private-sector participation in venture capital markets while supporting the broader government agenda of productive finance transformation.
The commitment is structured in two primary phases. The five financial groups will establish a private venture fund of funds worth 800 billion won by 2029, beginning with an initial deployment of 400 billion won in 2026. Hana Financial Group is positioned as the lead vehicle, pledging to contribute 100 billion won annually for a total of 400 billion won. In parallel, Hana, KB, Shinhan, and Woori will jointly establish a 100 billion won limited partner growth fund operating alongside the main fund-of-funds structure. Capital will flow through both indirect fund investments and direct lending mechanisms to maximize reach across the venture ecosystem.
The government is actively incentivizing private-sector participation through expanded tax credits and other regulatory support mechanisms. The initiative involves coordination among six related agencies, including Korea Venture Investment Corp., Korea Technology Finance Corp., and Korea Growth Investment Corp., ensuring alignment between private capital deployment and public-sector venture development objectives.
This announcement comes as Korean brokerages have demonstrated significant capital-raising capacity and profitability. In the first quarter of 2026, Korean brokerages collectively raised 57 trillion won ($39 billion) through investment management accounts and notes, strengthening their position as risk capital providers. The brokerage units of the five largest financial groups reported combined net profits of 1.23 trillion won ($836 million), representing a 132.3 percent increase, demonstrating the growing importance of venture and alternative investment activities to institutional financial groups' earnings.
The commitment is structured in two primary phases. The five financial groups will establish a private venture fund of funds worth 800 billion won by 2029, beginning with an initial deployment of 400 billion won in 2026. Hana Financial Group is positioned as the lead vehicle, pledging to contribute 100 billion won annually for a total of 400 billion won. In parallel, Hana, KB, Shinhan, and Woori will jointly establish a 100 billion won limited partner growth fund operating alongside the main fund-of-funds structure. Capital will flow through both indirect fund investments and direct lending mechanisms to maximize reach across the venture ecosystem.
The government is actively incentivizing private-sector participation through expanded tax credits and other regulatory support mechanisms. The initiative involves coordination among six related agencies, including Korea Venture Investment Corp., Korea Technology Finance Corp., and Korea Growth Investment Corp., ensuring alignment between private capital deployment and public-sector venture development objectives.
This announcement comes as Korean brokerages have demonstrated significant capital-raising capacity and profitability. In the first quarter of 2026, Korean brokerages collectively raised 57 trillion won ($39 billion) through investment management accounts and notes, strengthening their position as risk capital providers. The brokerage units of the five largest financial groups reported combined net profits of 1.23 trillion won ($836 million), representing a 132.3 percent increase, demonstrating the growing importance of venture and alternative investment activities to institutional financial groups' earnings.
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