LG Elec’s early-stage startup investments in US fare well

LG Electronics Inc.'s early-stage investments in US tech startups will likely generate decent returns as they have raised additional funding at higher valuations than estimated by the South Korean company.

Their growth potential will also provide LG with opportunities to enter deep-tech industries via partnerships with them as LG aims to transform into a platform-based tech giant.

LG Electronics' North American Innovation Center (LG NOVA), established at the end of 2020, leads startup investments in the region. It is a VC and startup incubator based in California's Silicon Valley.

Sokwoo Rhee, senior vice president of LG Electronics, heads LG NOVA.

Before joining LG Electronics, he served as associate director for cyber-physical systems innovation at an institute within the US Department of Commerce.

LG NOVA is in charge of identifying, assessing and developing technologies for internet of things (IoT) and cyber-physical systems (CPS), as well as smart city applications, while establishing partnerships with industry, government and academic stakeholders.

Rhee also worked for the White House Presidential Innovation Fellows, a program that nurtured and managed cross-sector projects for IoT and CPS technologies.

Since taking office as LG Electronics’ Chief Executive, Cho Joo-wan has been accelerating investment in startups in the fields of connected health, which provides anytime, anywhere health care based on connectivity: e-mobility infrastructure related to EVs and electric kickboards; and the metaverse, an online market that enables social and economic activity.

NeuroTrainer is one of its successful investments. In 2022, NeuroTrainer won LG NOVA's “Mission for the Future Challenge” as a top 10 finalist in the startup pitch competition, securing a $100,000 investment from LG NOVA.

The developer of a virtual reality (VR)-based brain training platform, NeuroTrainer is working to commercialize cognitive training systems for athletes in tandem with LG.

It is the official training partner of LA Galaxy, an American pro men’s soccer club.

Last month, US venture capital company 9.58 Ventures selected NeuroTrainer as one of the first four companies to invest in and injected $1.5 million into the startup.

The venture capitalist bet that NeroTrainer’s VR brain training platform will be used in diverse areas such as exercise, education and national defense.

XRHealth Virtual Clinic is another US startup that received LG NOVA’s investment.

Earlier this year, the Boston-based developer and operator of virtual treatment rooms, announced a merger with Spain-based Amelia Virtual Care, a VR platform for mental health professionals, to create the world’s largest XR therapeutics platform.

SparkCharge, a mobile charging service provider for EVs, secured a Series A investment of $7 million from Cleveland Avenue after LG NOVA invested in it. The investment brought SparkCharge’s total Series A funding to $30 million.

A VC industry official said LG NOVA has been improving investment efficiency, which refers to the risk, return and cost of an investment management structure.

Buoyed by the increased valuations in those US startups, LG will expand its startup investment pool from $20 million. In August, it agreed with Clearbrook Capital Partners to raise more than $100 million in a new startup fund by the end of 2024.

Clearbrook targets growth companies based in Europe, the Middle East, Africa and North America.

“We will further expand investment in innovative companies to secure future growth engines,” said an LG Electronics official.

“We will identify, support and foster more innovative companies.”

Write to Jeong-Soo Hwang at hjs@hankyung.com
 
Yeonhee Kim edited this article