The Ministry of Science and ICT’s Korea Post will work with Korea Venture Investment to create a venture fund to foster domestic unicorn companies.

Korea Post and Korea Venture Investment on Wednesday signed a memorandum of understanding to accelerate the formation of the venture fund and expand financial synergies.

Under the agreement, Korea Post will offer preferential terms in its review process when a venture fund manager selected by Korea Venture Investment applies to Korea Post’s capital commitment programme. Korea Venture Investment will apply to Korea Post private investor incentives chosen by the manager, including priority loss coverage and the transfer of excess returns, in the venture fund to be formed.

The two organisations aim to shorten the time needed to form venture funds and expand liquidity supply to the venture investment market. They also aim to provide needed capital on time to venture companies with high growth potential and increase the pace of investment deployment.

Korea Post chief Park In-hwan (박인환) said the agreement would strengthen Korea Post’s capital commitment base for venture funds. He said Korea Post would work closely with Korea Venture Investment so that needed funds can be supplied on time to companies with strong growth potential.

Korea Venture Investment CEO Lee Dae-hee (이대희) said partnering with Korea Post, which has a nationwide financial infrastructure, would provide momentum to the venture investment ecosystem. He said the organisations would drive the early formation of venture funds and build a foundation for ventures and startups to become global unicorn companies.