LG Group, South Korea’s fourth-largest conglomerate controlling electronics, chemicals, media and service companies, is aggressively raising the stakes in the artificial intelligence arena, making generous bets on AI startups offering great synergy potential with its existing businesses to drive their future growth.
Just a little over a year after LG joined a Series A funding round of Hume AI, a NYC-based startup developing AI systems that can understand, recognize and respond to human emotions, the major Korean business group has recently decided to make an additional investment in the emotional intelligence startup, according to sources in the venture capital industry on Thursday.
Hume AI offers AI and machine learning tools for understanding vocal and nonverbal communications including the tune, rhythm and timbre of speech, vocal bursts like laughs, sighs and umms, as well as facial expressions.
Its software is applied to diagnosis and treatment of mental health conditions, as well as patient monitoring and crisis prediction. It is currently used by about 2,000 organizations, including hospitals, healthcare companies and research labs.
Screenshot of Hume AI website During its Series A funding round in late 2022, LG was the only Korean investor in the emotional intelligence startup founded in March 2021.
LG Technology Ventures invested in Inworld AI during its Series A funding in 2022 and Series B funding in 2023.
Inworld AI is a US startup developing an AI-based character engine for games, virtual reality and augmented reality, and its valuation topped $500 million at the last funding round.
Despite its short history of operations since 2021, LG has decided to make a follow-on investment in the company in confidence that its AI technology would gain traction in the booming AI era.
“LG, which has picked AI as one of its next growth drivers, is going all out to invest in related startups abroad,” said an official in the investment industry, noting that LG has steadily increased its investment in startups instead of acquiring the whole company.
LG Uplus Kidstopia metaverse service LG is also known to invest in a startup with a technology that can be applied to its mainstay businesses for synergy.
In January, LG invested in Eatron Technologies, a UK-based startup developing an AI-powered edge-to-cloud connected battery management software that accurately measures remaining battery capacity.
The startup is expected to make great synergy with LG Energy Solution Ltd., LG’s battery-making unit that is the world’s second largest in electric vehicle battery sales.
LG also joined the initial funding round of Anthropic, a challenger to OpenAI and Google’s generative AI, Humane developing AI wearable devices and Venti Technologies, a developer of AI-controlled smart logistics solutions.
LG Technology Ventures hosts an open innovation summit in Silicon Valley June 26-27, 2023(Courtesy of LG Group) LG Technology Ventures was established in 2018 in California's Silicon Valley immediately after LG Chairman Koo Kwang-mo took the helm of the group.
It currently manages fund assets worth over 1 trillion won ($751 million) raised by its sibling companies like LG Electronics Inc., LG Display Co. and LG Chem Ltd. and invests in early-stage startups in AI, mobility, advanced materials, life sciences, next-generation display, mobile and 5G.
For six years since Koo’s inauguration, the venture capital has invested hundreds of billions of wons in about 70 startups. Even during the startup funding winter last year, the Korean conglomerate did not stop making big bets on startups.
As taking the leadership in AI technology is becoming more important in the AI era, LG is expected to move beyond equity investment to acquire startups, industry analysts projected.
Write to Chae-Yeon Kim at why29@hankyung.com Sookyung Seo edited this article.
