The South Korean government is firming up plans for a state-backed venture investment arm modeled on In-Q-Tel, the U.S. Central Intelligence Agency’s investment vehicle, according to the Ministry of SMEs and Startups. The institution is expected to launch by the end of the first half of next year at the earliest, or during the second half at the latest. It plans to raise a 50 billion won fund to invest in companies developing advanced technologies tied to national security, including artificial intelligence, semiconductors, space and defense. Its headquarters will likely be located in Seoul or the surrounding metropolitan area, where hiring specialized investment professionals is easier.
The Korean version of In-Q-Tel will launch by the end of the first half of next year at the earliest, the ministry and industry sources said on the 5th. Establishing the institution requires prior passage of a special act on fostering innovative companies in new security fields. The government aims to have the bill approved by the National Assembly this year, followed by roughly six months of preparation after promulgation before formal establishment procedures begin.
Seoul is under strong consideration for the headquarters. Korea Venture Investment Corp., which will serve as the parent organization, is based in Seoul, and the capital offers a relatively larger pool of investment professionals. The government considers staff expertise paramount, given that the institution will use public funds to select and back advanced-technology companies and support the country’s security competitiveness over the long term.
The ministry is considering assigning personnel with master’s and doctoral degrees and a strong grasp of security-related advanced technologies — AI, semiconductors, space and aviation, and defense — to investment screening and deal sourcing. Unlike conventional venture capital firms that focus on financial metrics such as revenue and growth, the institution must also assess technological excellence and strategic value.
Investment capital will be secured at launch. The ministry and the Defense Acquisition Program Administration each plan to contribute 25 billion won to form a fund totaling 50 billion won. The government aims to add tens of billions of won annually thereafter, expanding the fund beyond 200 billion won by 2030.
The investment scope will not be limited to the traditional defense industry. The plan is to look broadly at technologies that could affect national competitiveness or security in the future, not just those with direct military applications.
Investments will likely center on early-stage technology companies. The aim is to identify companies early that have strong technology and high potential value for national security, even if their revenue or profitability has yet to be sufficiently proven. Investment per company is being discussed at around 2 billion to 3 billion won.
The institution also plans to prioritize technological excellence and strategic national need over immediate investment returns. Companies that need years to commercialize their technology, or that operate in markets still too small to attract private capital, could become investment targets if their technology holds sufficient value.
The government believes that focusing on selecting superior technologies will naturally bring fund returns as well. In-Q-Tel, the venture investment firm established under the CIA’s leadership, also focused on securing strategically important technologies rather than profit, yet posted strong returns after identifying Palantir at an early stage before it grew into a global AI company.
#InQTel#KoreaVC#DefenseTech#NationalSecurity#Semiconductors#SpaceTech
Original reporting by Ryu Seok for Seoul Economic Daily.
AI-translated from Korean. Quotes from foreign sources are based on Korean-language reports and may not reflect exact original wording.
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