LG Uplus’ platform push gains traction with active venture funding  

LG Uplus Corp., South Korea’s third-largest mobile carrier, which has joined its two bigger local rivals in a race to expand non-telecom services, is beefing up investments in startups to hunt for new drivers that can accelerate its push to transition into a platform company.

LG Uplus early this month invested 3 billion won ($2.3 million) in Vetching, the developer of electronic medical record (EMR) and customer relationship management (CRM) solution Plusvet for veterinarians, according to venture capital industry sources on Monday.

Plusvet enables veterinarians to digitally manage appointments, consultations, payments as well as medicine orders and management. It is Korea’s only cloud-based EMR for veterinarians.  

With the investment, LG Uplus is expected to accelerate its venture into the pet technology sector under the direction of LG Uplus President Hwang Hyeon-sik, who is calling for changes in the traditional telecom company’s business portfolio with new growth engines.  

The company is expected to introduce an AI-powered voice bot service for vets by incorporating its Artificial Intelligence Contact Center (AICC) technology with Vetching’s technology.

It is also readying to launch a new pet care platform for pet grooming and accessories in view of the burgeoning pet care market in the country.

AGGRESSIVE STARTUP VENTURE INVESTMENT  

The latest investment underscores LG Uplus’ business strategy shift to catch up to its bigger rivals in their race to transform into platform companies.  

The latest investment comes just a month after it invested 3 billion won in Somssidang Company, the operator of a social platform for hobbies and leisure activities in a Series A funding round in July.

The Korean telecom company invested a total of 90 billion won in 18 startup ventures through all of 2022 and January-August this year.

That is about triple its total investment in 2020 and 2021.

As LG Uplus plans more investments in startups this year, its total 2022-2023 venture investment is forecast to quadruple its total 2020-2021 investment, said an official from the company.

SHIFT FROM TRADITIONAL TELECOM BUSINESS

LG Uplus’ aggressive startup venture investment is expected to intensify competition in the Korean telecom industry to reduce the industry’s reliance on traditional telecom businesses and beef up non-telecom services as new revenue sources in the saturated telecom market.  

In September last year, LG Uplus President Hwang unveiled the company's new vision dubbed Uplus 3.0 to transform into a platform company by bulking up the share of non-telecom services to 40% of entire sales by 2027 to improve its valuation to 12 trillion won.

As of 2021, its enterprise value was estimated at 6 trillion won, with non-telecom services accounting for 20% of total sales.

Korea’s No. 1 mobile carrier SK Telecom Co. is also actively adding new services to transform into an artificial intelligence company.

It has already joined hands with promising Korean AI solution startups such as self-driving vehicle AI solution developer Phantom AI Inc., AI chip designer Sapeon Inc., machine learning firm Moloco Inc., and more.

KT Corp. is also expanding business-to-business services ranging from cloud and data to AI and robotics under its digital transformation (DX) drive.

In June, it vowed to spend about 7 trillion won by 2027 to become the country’s largest AI service provider focusing on robotics, healthcare and education.

KT and KT Cloud also announced in July a plan to invest 15 billion won in Moreh, an AI computing infrastructure startup.

Write to Ji-Eun Jeong at jeong@hankyung.com

Sookyung Seo edited this article.