The South Korean government will establish a KRW 113.5 billion ($102 million; €95 million) fund for early stage companies in the biotech sector, according to the Ministry of Science, ICT and Future Planning.
Capital from the fund will be used to establish infrastructure and to help start-ups and entrepreneurs develop new biotechnologies.
South Korea’s Small and Medium Business Administration and the Ministry of Trade, Industry and Energy are teaming up with the ministry of science to manage the fund.
The fund is not the first of its kind. In December last year, state-run Korea Development Bank set up a fund worth KRW 120 billion together with the Industrial Bank of Korea, investment firm Multi Asset Global Investments, and Hong Kong’s Yuanta Securities to finance biotech and healthcare start-ups.
South Korea is home to approximately 200 biotech companies ranging from genomics, to drug delivery and agricultural biotechnology. The government has been accelerating investments into the sector, as it forecasts that the global biotechnology market will reach $2.6 trillion by 2024, surpassing the combined market size of the country’s top three exports – semiconductors, chemicals and automotives.
Private equity investors who have backed biotech companies in Korea include Singapore state investor Temasek, with its acquisition of biopharma firm Celltrion for $257 million in 2010, as well as Seoul-based STIC Investments which has invested in pharmaceutical company Medytox and R&D company Access Bio.