In South Korea, conglomerates strictly restricted in owning financial units will be allowed to establish corporate venture capital (CVC) units under their holding groups, according to the latest economic outline from the finance ministry, reported by Pulse.
In the sixth emergency economy meeting chaired by President Moon Jae-in yesterday, it was revealed that the deregulation could be in place by September, allowing conglomerates to establish CVC subsidiaries.
This partly reflects the facts on the ground as Samsung, LG, Hyundai, SK, Lotte and Naver have been increasingly active CVC investors through rule workarounds, but it comes as pressure grows on economies to fund innovation as a way of bouncing back from the coronavirus.
South Korea plans $62bn in funding in a New Deal targeting the digital and green economy, while Europe last week said it intends to invest about $100bn in innovation funding over the seven years from 2021.
For context, however, China’s big two conglomerates – Tencent and Alibaba – are planning a combined $100bn of deep tech investments over three to five years.
Tencent, which is reportedly buying a $200m stake in Warner Music Group to go with minority stakes in Spotify and Universal Music Group in addition to its own Tencent Music streaming business, will tomorrow issue $6bn of loan notes to help pay for its $70bn program of corporate venturing and investment.
As Martin Lau, president of Tencent, which is a member of the GCV Leadership Society and on its advisory board meeting, said today: “We are pleased with the positive response to the notes, demonstrating investors’ recognition of our fundamental business resilience, which enables us to sustain robust cash flows while fulfilling our responsibilities to society.”
We’ll hear more on the companies from East and West preparing to invest in their futures at the www.GCVDigitalForum.com on 3-4 June, as well as the government leaders, universities and startups making the world a better place.
