Corporate VC veterans pinpoint their best investments 

South Korean conglomerates in recent years have ramped up their investment in startups, yielding positive returns. 

Hyundai Motor Co. Vice President Shin Sung-woo, who leads the company’s corporate venture capital efforts, named SureSoft Technologies Inc. as a successful CVC investment. 

SureSoft Technologies provides safety certification for software and aims to go public next year. Its tools evaluate whether software equipped in vehicles and facilities is working properly, which requires a high level of technology due to safety issues.

“We decided to invest in the startup at the recommendation of Hyundai Motor’s research institute because it boasts an unrivaled level of technical prowess,” said Shin. 

SureSoft Technologies Inc. independently developed a code scroll, which attracted market attention after Japanese auto giant Toyota Motor Corp. announced its plans to recall approximately 5.2 million vehicles in January 2010.

The startup garnered 1.5 billion won ($1.1 million) from Hyundai Motor in 2012. 

As of early this year, Hyundai Motor is the third largest shareholder of SureSoft Technologies with a 15.9% stake. 

Oregon-based small modular reactor (SMR) company NuScale Power Corp. is using SureSoft Technologies’ tools. 

Lotte Ventures’ Director Bae Jun-seong picked augmented reality (AR) optical system provider LetinAR Inc. as the quintessential CVC. 

Founded in 2016, LetinAR is known for its PinMR technology, developed to redress the common failings in heavy and expensive hardware that inhibit the construction of real eyeglass-shaped designs.

The startup claims to be as competent as Glass developed by Google LLC and Microsoft HoloLens. 

When Bae was sealing the deal with LetinAR, he did not expect the investment to yield an extensive synergy effect with the wider Lotte Group. In addition to the collaborations with Lotte World theme park and Lotte Logistics’ fulfillment center, the startup is also assisting in the group’s metaverse businesses. 

Another success story for Lotte Ventures is Bear Robotics. 

Lee Jong-hoon, who is now the CEO of the CVC arm of GS E&C dubbed XPLOR Investment, led the investment during his time at Lotte Ventures. 

Service robot maker Bear Robotics began mass-producing its food delivery robot  Servi in South Korea two years ago.

Including locations operated by the Lotte Group, the Servi robots have delivered 28 million meals over a combined 539,130 kilometers in Korea, Japan, and the United States.

While the corporate value stood at around 40 billion won ($28.2 million) at the time of investment, it is poised to become a unicorn soon. 

Lee Sung-hwa, Managing Director at GS Retail Co., picked artificial intelligence startup Moloco Inc. as the company’s best CVC investment so far. 

Former engineer at Google Ahn Ikk-jin co-founded the AI-powered advertising solutions startup in 2013 and GS Retail plugged 7.2 billion won into the Silicon Valley-based AI firm seven years later.

Back in August 2021, the startup raised around $148.1 million in a funding round led by US-based Tiger Global Management and was already valued at around 1.7 trillion won. 

When GS Retail was still GS Home Shopping, it was advancing its algorithm within the online mall using AI. 

The company’s management decided that using Machine Learning technology is a must to effectively organize the different categories.

Thanks to Moloco’s support, the return on ad spend (ROAS) of GS Retail’s online shopping platform GS Shop skyrocketed by 4,000%.

Moloco’s corporate value jumped 20 times in the three years following GS Retail’s investment. 

In addition to AI, GS Retail is also bullish on several pet startups, having invested in Fitpet, aboutPet and Pet Friends. 

Write to Lan Heo, Jong Woo Kim at why@hankyung.com
Jee Abbey Lee edited this article.