The Korea Venture Capital Association (KVCA) has put forward a bold proposal to reshape the KOSDAQ market: a KRW 30 trillion, five-year fund run by institutional investors.
At its core, this proposal targets a fundamental weakness in Korea's tech-heavy KOSDAQ market. Unlike major global exchanges, KOSDAQ is overwhelmingly dominated by individual retail traders, while large institutional investors account for a mere 4.5% of trading value. This creates high volatility and, more importantly, a critical funding gap for promising companies after they go public. Once a startup completes its IPO, it often struggles to secure the large, stable, 'follow-on' investments needed to scale into a global player. The KVCA argues this is the main bottleneck preventing Korea from reaching its goal of a "KRW 40 trillion annual venture investment era."
This call for change didn't happen in a vacuum; several factors created the perfect moment for this proposal. First, the Korean government has already laid the groundwork with its "Venture 4 Big Powers" initiative, signaling a strong commitment to boosting the venture ecosystem. Second, the market itself has shown it's ready. The KOSDAQ's total market value recently surpassed KRW 500 trillion, proving it has the capacity to absorb a large fund. At the same time, a strong market rally in early 2026 and a supportive low-interest-rate environment created favorable conditions. Finally, regulators have been working to improve market quality by delisting underperforming firms, which increases the need for stable, long-term investors to anchor the market.
The proposed KRW 30 trillion fund is more than just a pool of money; it's designed to be a structural game-changer. By creating a dedicated, large-scale buyer, the fund would act as an 'institutional anchor' for the KOSDAQ. This would achieve several goals at once: provide stable demand for new listings and follow-on offerings, reduce wild price swings, and give promising tech companies the patient capital they need to grow. In essence, it aims to transform KOSDAQ from a speculative trading playground into a mature market for long-term value creation.
Ultimately, the KVCA's proposal is a strategic move to connect the dots between government ambition, market momentum, and regulatory reform. It seeks to convert the current positive but cyclical energy in the market into a durable, structural foundation for Korea's next generation of innovative companies.
- KOSDAQ: Korea's stock market index for tech-focused and venture-backed companies, similar to the NASDAQ in the U.S.
- Institutional Investors: Large organizations, such as pension funds, insurance companies, and asset management firms, that invest large pools of capital.
- Follow-on Funding: Additional capital raised by a company after its initial public offering (IPO) to finance further growth.