LG Electronics to form $100-million global startup fund

LG Electronics Inc. has committed over $100 million to a startup fund to unearth new technologies in sustainable energy, digital health, artificial intelligence and industries of the future, a move that is expected to accelerate its transition into a platform-based tech giant.

The South Korean home appliance giant announced on Thursday that it will join hands with global investment advisory and asset management firm Clearbrook LLC to inject more than $100 million in a startup fund, dubbed NOVA Prime Fund, by 2024.

The fund will mainly invest in sustainable energy, digital health, immersive AI and other future technologies, which are also the Korean company’s next growth engines chosen to expedite its transition to a platform company.

“The strategic investments we have made with LG NOVA and its Mission for the Future Program have led us to take the next step in working with Clearbrook and others to support the accelerated growth of new technological solutions in digital health, sustainability and future solutions platforms that benefit society,” LG Electronics Chief Executive Cho Joo-wan said in a statement celebrating the launch of the fund.

LG NOVA is LG Electronics’ North America Center for Innovation, which is the Korean electronics giant’s venture capital and startup incubating organization established in Silicon Valley, California in 2020.

The latest fund size is five times bigger than LG NOVA’s initial fund of $20 million formed upon its foundation.

CEO Cho has been stressing the importance of LG NOVA’s role in LG Electronics' transformation into a smart life solution company.

LG NOVA AT THE CENTER OF LG TRANSITION

LG NOVA hosts the Mission for The Future Program, a startup pitch competition attracting more than 2,000 startups in healthcare, clean technology, mobility, connected home and metaverse sectors from across the world.

It will again pick innovative companies and technologies to receive investments from the NOVA Prime Fund.  

The Korean home appliance giant in early July unveiled its new business vision to transform into a smart life solution provider that connects various consumer experiences.

CEO Cho said at that time that LG will strive to achieve 100 trillion won ($76.8 billion) in annual sales by 2030, up sharply from 65 trillion won in 2022 under the new strategy. The company will invest 50 trillion won through 2030 to make over its business portfolio.

The company has chosen open innovation as a means to find new growth drivers and will tap promising startups with equity investment and strategic partnerships, it said.

“As there is no company that can do everything by itself, we are actively seeking collaboration with strategic partners from across the world,” Cho said at the 2023 CES in Las Vegas in January.

ClearImpact Ventures, Clearbrook’s VC arm, will be the general partner of the NOVA Prime Fund, while LG Electronics will be a limited partner.

Established in 2004, Clearbrook is an investment management and consultancy firm with over $10 billion in assets under advisement and management.

Those startups selected by LG NOVA as fund beneficiaries will be eligible for both Clearbrook’s global commercial acceleration resources and LG’s support for their accelerated growth.

Write to Ye-Rin Choi at rambutan@hankyung.com


Sookyung Seo edited this article.