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We are LUMOS, your automated solution for government R&D funding management.
As we head into 2024, many aspiring entrepreneurs and companies are preparing to apply for government funding programs. We know many of you are already looking for information.
With recent news reports about potential government budget cuts for support programs, you might be concerned. However, we are pleased to inform you that there is no need to worry. In fact, the budget for the Ministry of SMEs and Startups has increased.
The 2024 budget for the Ministry of SMEs and Startups has been finalized at 14.5 trillion KRW, representing a 7.3% increase from the previous year.
The budget allocation focuses on three primary areas:
“Overcoming Crises and Fostering Entrepreneurial Micro-Enterprises” = 5.0 trillion KRW
“Leaping Forward as a Global Startup and Venture Powerhouse” = 1.4 trillion KRW
“Promoting Manufacturing Innovation, Export Facilitation, and Financing for SMEs” = 7.9 trillion KRW
The budget has been allocated as established above.
The budget for "Leaping Forward as a Global Startup and Venture Powerhouse" rose from 1.3229 trillion KRW in 2023 to 1.4452 trillion KRW in 2024. This is an increase of 122.3 billion KRW, or 9.2% year-on-year.
In particular, TIPS (Tech Incubator Program for Startups) is Korea's flagship startup support program. Since 2013, it has provided R&D, commercialization, and global marketing support to promising startups that have received prior investment from designated private venture accelerators. The TIPS budget raised from 110.1 billion KRW in 2023 to 130.4 billion KRW for 2024. This represents an 18.4% increase, or an additional 20.3 billion KRW.
Furthermore, in 2024, the government will strengthen support for startups that have secured domestic investment and launch the "Global TIPS Track" to support 20 selected companies.
To help domestic startups expand overseas, global tech leaders such as Google, Microsoft, NVIDIA, and IBM are providing startup support programs in partnership with the government, which provides corresponding commercialization funding. In 2024, the scale of support for the "Global Company Collaboration Program" will expand from 270 to approximately 290 startups, and additional global corporate partners will be recruited.
From an investor's perspective, the Fund of Funds (Korea Venture Investment Corp) is also a critical component. To revitalize the venture investment market and address the cash funding shortages faced by startups, the Ministry of SMEs and Startups has decided to significantly expand its Fund of Funds budget to supply liquidity into the ecosystem. In 2024, the Fund of Funds aims to raise approximately 1 trillion KRW in investment capital, including the "Startup Korea Fund" and "Global Fund." Notably, the "Global Fund," which is backed by the Fund of Funds and managed by international venture capital firms, is expected to help Korean startups expand globally by integrating them into international investor networks. The budget rose from 313.5 billion KRW in 2023 to 454.0 billion KRW in 2024, representing an increase of 140.5 billion KRW, or 44.8%.
Despite concerns regarding reduced government spending, the actual budget for venture businesses and the startup ecosystem has increased. Therefore, there is no need to worry.
Naturally, we expect a corresponding increase in the rigor of audits and fiscal management regarding these government funds.
To ensure absolute compliance and seamless financial management, we invite you to experience the services provided by LUMOS.
We will return with more useful insights in our next update.
Thank you.
