LIG Nex1 Co., South Korea’s major defense exporter, plans to set up a $80.5 million venture investment fund with Eugene Investment & Securities to support local startups in the sector.
LIG Nex1, the developer of the mid-range surface-to-air missile (M-SAM) system, and Eugene agreed to cooperate in discovering and fostering venture companies that are expected to upgrade the country’s defense industry in the global market.
The two companies decided to jointly establish and operate a fund for defense sectors including aerospace, information and communication technologies, new materials, secondary batteries, semiconductors, displays and robots.
They reportedly aim to raise 100 billion ($80.5 million) for the fund, which LIG Nex1 said will be the first one set up by private sectors in the country for the defense industry, although they did not disclose its size.
“The venture investment fund will be a foundation for startups with excellent technologies and outstanding ideas to seek new opportunities for development and innovation,” said LIG Nex1 Chairman Koo Bon-sang.
TO EXPAND BUSINESSES INTO CIVILIAN INDUSTRIES
To nurture such startups, LIG Nex1 is set to utilize its infrastructure and know-how accumulated in areas such as aerospace, guided weapons, surveillance and reconnaissance, communication equipment, as well as aviation and electronic warfare, combining Eugene’s capabilities of financial expertise and fund management.
LIG Nex1 and Eugene will collaborate on the discovery of promising startups and support their growth, assistance for those startups’ entry into the defense industry while enhancing network exchanges between themselves.
The defense maker needs to cooperate with startups that have good technologies and ideas as it is actively expanding its business into civilian sectors such as drones and urban air mobility (UAM), Koo said.
LIG Nex1 has been working for the development and mass production of the M-SAM system, known as Cheongung II in Korean, or heaven’s bow, with not only large companies such as Kia Corp., Hanwha Defense Co. and Hanwha Systems Co. but also small and medium-sized enterprises. LIG Nex1's mid-range surface-to-air missile Cheongung II LIG Nex1 is seeking to export the M-Sam system to other countries in the Middle East after signing a 2.6 trillion won deal to sell the system to the United Arab Emirates in January.
Write to Kyung-Min Kang at kkm1026@hankyung.com Jongwoo Cheon edited this article.
