South Korean authorities opted not to privatize KDB Capital Corp., a unit of state lender Korea Development Bank (KDB), to instead employ it as a public seed investor for startups in line with the government’s policy on promoting innovations.

The proposal to turn the credit specialty firm into a backer of startups and emerging companies would be included in the government’s fourth industrial revolution roadmap to be announced next month, according to an industry insider.

Past conservative governments attempted to privatize KDB’s capital unit but could not find buyers.

Authorities are mulling to use the policy bank and its unit for financing the government’s agenda to stimulate evolution into the age of digital and autonomous technologies.

The move more or less means that the government has given up on the plan of privatizing KDB Capital once it gets a bigger public role, said an industry source.

KDB Capital was established as a merger between Korea Industrial Leasing Company and Korea Technology Finance Corp. in 1999. Fully owned by KDB, the company devotes most of its attention to fintech, having invested about 3 trillion won ($2.74 billion) in the sector in the first quarter. In the third quarter, it generated an operating profit of 94.2 billion won in investment finance, 134.4 billion won in loan finance and 78.7 billion won in lease finance.

By Lee Seung-yoon and Kim Hyo-jin

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