South Korea seeks Silicon Valley VC backing as NPS signs investment MOUs

South Korea has moved to deepen venture capital ties with Silicon Valley as President Lee Jae-myung has urged six of the world’s largest venture capital firms to invest in Korean startups while the National Pension Service has signed long-term investment cooperation agreements with them.

According to South Korean newspaper Asiae, President Lee Jae-myung has asked six major Silicon Valley venture capital firms, including Sequoia Capital, Andreessen Horowitz (a16z), Khosla Ventures, Lightspeed Venture Partners, General Catalyst and New Enterprise Associates (NEA), to increase investments in South Korean startups as the country pushes to attract more global capital into its technology sector.

The report said the National Pension Service (NPS) also signed separate memorandums of understanding with the six venture capital firms to establish long-term investment cooperation, creating a framework to explore investment opportunities together, exchange market information and strengthen links between Korea’s startup ecosystem and global venture capital networks.

The latest agreements come as the South Korean government continues introducing policies designed to draw overseas investors into domestic technology companies while supporting local innovation through public funding initiatives.

Silicon Valley firms join Korea’s startup investment push

Asiae said the government is pairing the new venture capital partnerships with its planned National Growth Fund, a 200 trillion won investment vehicle expected to support future industries including artificial intelligence and semiconductors.

The publication said market participants expect policy funding, private investment and overseas capital to enter the Korean venture ecosystem at the same time if the initiatives move forward as planned. Technology sectors such as AI and semiconductors are expected to receive increased investor attention under that framework.

Rather than treating the agreements as a source of capital alone, the newspaper said Silicon Valley firms also bring decades of experience identifying early-stage technology companies, helping founders build growth strategies and connecting startups with international markets.

According to Asiae, firms such as Sequoia Capital and Andreessen Horowitz have previously backed companies that later developed into major global technology businesses, giving Korean startups access not only to funding but also to operational knowledge and international business networks.

The publication argued, however, that attracting overseas investment should not become the government’s only objective.

Asiae said policymakers now face a second challenge after securing investor interest by creating conditions that encourage successful startups to continue expanding from South Korea instead of relocating high-value operations overseas.

The editorial said the country should strengthen tax rules surrounding stock options so startups can compete more effectively for skilled employees while also improving visa policies and long-term residency conditions for foreign founders, engineers and technical specialists.

In addition, the newspaper said South Korea should develop stronger exit opportunities through mergers and acquisitions alongside public listings, arguing that a healthier acquisition market would provide investors with more ways to realize returns.

The publication also called for closer cooperation between universities, research institutions and startup companies so academic technologies can move into commercial businesses more efficiently. Improving English-language disclosures and simplifying investment-related administrative procedures would also make Korea more attractive to international investors, according to the report.

Asiae argued that business-friendly conditions, rather than restrictive regulations, will ultimately determine whether companies continue building products and creating jobs inside the country.

National Pension Service faces calls to preserve investment independence

Alongside the government’s efforts to attract foreign investors, the National Pension Service has become one of the key institutions participating in the cooperation agreements.

Asiae said the pension fund should continue making investment decisions independently despite its partnerships with globally recognized venture capital firms.

According to the newspaper, the retirement savings managed by the NPS should not become a policy instrument for industrial development, adding that investment decisions should continue following established return and risk principles.

The publication also cautioned that partnerships with internationally known venture capital firms do not eliminate investment risks simply because of their reputations.

Industry participants cited by Asiae also warned that excessive capital flowing into a small number of highly sought-after startups could inflate company valuations, creating pressure if those valuations later decline during initial public offerings or merger transactions. Such corrections could reduce investment returns for participating funds.

South Korea expands digital finance alongside startup investment

The latest venture capital initiative comes as South Korea continues expanding investment and financial infrastructure across its technology sector.

Earlier this month, Mirae Asset completed its acquisition of cryptocurrency exchange Korbit after receiving regulatory approval, becoming the first affiliate of a traditional Korean financial group to acquire a domestic crypto exchange. The company has said the acquisition is intended to support future business opportunities tied to digital assets.

Separate partnerships have also emerged across the country’s digital finance industry. Circle recently signed memorandums of understanding with Kakao Group and fintech operator Toss to study blockchain payments, stablecoin infrastructure and cross-border settlement, while stressing that the agreements focus on infrastructure rather than launching a Korean won stablecoin.

At the same time, South Korean authorities have continued developing blockchain-based payment systems through the Bank of Korea’s Project Hangang. Last week, government agencies launched a 9.6 billion won project to extend CBDC-backed deposit token payments into commercial use, with commercial banks, payment companies and merchants participating in the next stage of testing.