[Edaily Marketin YunJi Kim Reporter] “Whereas in the past we looked at what not to invest in, now we look at which entrepreneurs to invest in.”

A South Korean capital markets official who recently attended an international conference on “faith-driven investing” conveyed the atmosphere at the event in these terms. “Faith-driven investing”—which considers not only a company’s growth potential and profitability but also the founder’s faith and values—is gaining traction in the U.S. venture capital (VC) market. Whereas in the past, investors merely excluded companies—such as those in the alcohol, tobacco, and gambling industries—that conflicted with religious values, the trend has recently shifted toward actively seeking out and investing in founders who operate their businesses based on Christian values.

Following a series of new fund launches by relevant VC firms last year, investment activity has continued this year in general technology companies, including those in artificial intelligence (AI), defense, and security. With the emergence of platforms that connect investors, fund managers, and founders, faith-driven investing is expanding beyond individual investment strategies to become a full-fledged venture capital ecosystem.

According to industry sources on the 19th, the number of VCs and investor networks advocating for values-driven investing is growing rapidly in the United States. Face-driven investing is an investment approach that, while fundamentally premised on financial returns, incorporates the values of founders and management, corporate governance practices, and the business’s social impact into investment decisions. Recently, relevant fund managers have raised new funds and begun making actual investments in general technology companies—such as those in AI, defense, and security—and separate platforms connecting limited partners (LPs) with fund managers and founders have also emerged.

A prime example is the U.S.-based Sovereigns Capital. In 2024, Sovereigns Capital raised its fourth venture fund totaling $60 million (approximately 84 billion won). This marks the largest fund the firm has raised since its inception, and through this fund, the company is focusing its investments on early-stage technology companies led by faith-based founding teams in the U.S. and Southeast Asia.

Investments are also being made one after another. Sovereigns Capital recently participated in a $9 million (approximately 12.5 billion won) seed round for the U.S. defense startup Ascari Defense. Askari is a company developing a portable, autonomous drone interception system. Builders VC led the investment, with Sovereign, Swell VC, Rule One Ventures, and others participating. It is reported that Sovereign highly valued the fact that the team reflects its faith and values in its management, in addition to possessing technological capabilities and growth potential.

Eagle Venture Fund, a U.S.-based early-stage impact venture capital firm, is also actively pursuing “face-driven” investments. In March, the firm led a seed investment in DarkWatch, which uses AI to track human trafficking and organized crime networks. Last year, it also launched Freedom Fund II, a $50 million (approximately 7 billion won) fund dedicated to investing in technology companies in this sector. It targets companies that can generate financial returns while also producing social impact aligned with Christian values.

The number of “faith-driven” venture capital firms—which base their investment decisions on the founder’s character and corporate culture—is also growing. For example, ElevenTribes Ventures in the U.S. raised a $46 million (approximately 6.5 billion won) Fund II last year and is investing in startups that incorporate Christian values into their corporate culture and management. Rather than selecting only startups in specific religious sectors or those led by Christian founders, the firm looks for teams capable of increasing corporate value in the long term by evaluating the founder’s resilience, interpersonal relationships, and organizational culture.

As investment targets and management strategies become more defined, the infrastructure to connect relevant capital is also taking shape. “Faith-Driven Investor,” a global network connecting investors and fund managers seeking to incorporate Christian values into their investments, operates a marketplace where founders and fund managers can post investment opportunities for review by qualified investors. Not only startups but also funds currently raising capital can register on the platform, which connects them with actual investors through demo days. In essence, this goes beyond individual VCs simply articulating their investment philosophies; it is creating a fundraising structure that links LPs, fund managers, and founders.

Commenting on this, a source in the domestic capital markets industry said, “As technological advancements—such as AI—rapidly narrow the technological gap between companies, U.S. investors seem to have ultimately begun placing greater importance on the people leading the companies and their values.” The source added, “As it becomes increasingly difficult to differentiate companies based solely on technology and business models, the principles by which founders run their companies may carry greater weight in investment decisions.”