Government to Foster Security Ventures: 50 Billion Won Fund to Be Established by Next Year

The government is pushing to establish a "Korean-style In-Q-Tel," modeled after the U.S. Central Intelligence Agency's (CIA) In-Q-Tel (IQT), to directly invest in and support the growth of companies in the emerging security sector.

Various safety measures are also set to be implemented, including confidentiality obligations for employees and the non-disclosure of information regarding investment institutions and funds.

The Ministry of SMEs and Startups announced the "Direction for Fostering New Security Innovation Companies," which includes these measures, at the "Future New Security Innovation Company Fostering Strategy Meeting" held at the Blue House today (June 26).

IQT is a non-profit venture capital (VC) firm established by the U.S. CIA in 1999. It plays a role in supporting the growth of promising security technology companies, such as those in artificial intelligence (AI) and drones, through investment.

It is operated entirely with government funds, and Palantir, an AI data analysis company, is a representative example of IQT's investments.

Benchmarking this model, the Ministry of SMEs and Startups has decided to establish a "Korean-style In-Q-Tel" in which the government will invest 100% directly into the new security sector.

It will be structured as a subsidiary of the Korea Venture Investment Corp. (KVIC), with joint investment from related agencies such as the Defense Acquisition Program Administration (DAPA).

The funding will utilize the budget allocated for fund investments by the Ministry of SMEs and Startups and DAPA.

The two agencies plan to contribute 25 billion won each to raise a total of 50 billion won by next year, with plans to secure additional funding annually for the following four years.

Furthermore, the government and professional investment institutions will create funds, and a public-private joint investment committee will be formed to invest in innovative companies and candidate firms.

The distribution of investment returns will be determined based on the equity stake in the fund, and all proceeds from government investments will be reinvested.

A phased investment system will also be established to lower business risks and support stable technology development.

Specifically, "initial investment" will address funding gaps for innovative and candidate companies during the early stages of technology development and provide support until development is complete.

"Follow-up investment" will inject additional capital for verification tests and application in the security sector after technology development is completed.

If necessary, the government plans to expand follow-up investment funds by linking them with defense policy funds.

In particular, to strengthen security due to the nature of the defense sector, legal grounds will be established for ▲ non-disclosure of information regarding investment institutions and funds, ▲ confidentiality obligations for institutional employees, and ▲ restrictions on hiring employees who are foreign nationals or hold dual citizenship.

An official from the Ministry of SMEs and Startups stated, "We are currently reviewing details such as the relevant budget and the scale of companies to be selected," adding, "We will conduct preliminary reviews on organizational operation plans and the establishment of regulations to ensure the Korean-style In-Q-Tel project can proceed in line with the enforcement of relevant laws."
※ Please note: This article was translated by AI and may contain errors.