The Owner Who Sold His Company to Samsung and Opened a Cafe... Secures 10 Billion Won Investment for Service Robots

[Start人] Startup XYZ CEO Hwang Seongjae
Solution to Long Hours and High-Intensity Labor for Self-Employed: Robots
Determined to Change the Harsh F&B Industry... Developed World's First 'Hand Drip Robot'
Robot-Made 9,000 Won Premium Coffee, Selling 100 Cups a Day 'Big Hit'
100 Billion KRW Series A Investment Led by Samsung Venture Investment and Zero One Nearing Completion
Acquired Autonomous Driving Startup 'Kobot' in June

Hwang Seong-jae, CEO of XYZ.
Photo by XYZ

[Asia Economy Reporter Kwak Minjae] Service robot startup XYZ announced that its Series A investment round worth 10 billion KRW, participated by Samsung Venture Investment and Hyundai Motor Group's Zero One Fund, is entering its final stages. Unlike other service robot companies, XYZ started in foodtech based on food and beverage (F&B). At the XYZ office in Seongsu-dong on the 30th of last month, founder and CEO Hwang Seongjae said with a smile, "I entered the service robot business to change the harsh reality of self-employed workers who have no choice but to work seven days a week while running a cafe in the basement of Teheran-ro, Gangnam," adding, "We have now grown into a service robot company with a cumulative investment of 10 billion KRW."

Started a Fire Tribe Cafe but Faced the Reality of ‘7 Days a Week’... Developed the World’s First ‘Hand Drip Robot’

Having completed his master's and doctoral degrees at KAIST, he is a co-founder of FuturePlay, well known as an accelerator (AC). After investing in over 150 companies at FuturePlay for five years, he co-founded ‘Plunty,’ an AI chatbot company, which was the first domestic startup to be acquired by Samsung Electronics. The biggest turning point in his life as a member of the Fire Tribe (early retirees financially independent) came when he opened a cafe in the basement of Teheran-ro, Gangnam. He said, "While experiencing rapidly changing tech companies at FuturePlay, I realized that the offline cafe industry had hardly changed at all when I actually ran one," adding, "To change the reality where F&B workers work 10.8 hours a day, only get three days off a month, and are tied to the store all day, I thought robots were the solution."

What kind of service robot did CEO Hwang envision? XYZ’s robots are far from unmanned robots designed simply to reduce labor costs and time. Rather, his goal is to enable F&B workers to earn more profit relative to their time investment through ‘luxury robot coffee’ where robots directly influence the taste of coffee and add analog sensibility. "At that time, robot cafes were emerging, but the robots’ roles were limited to serving, and selling cheap 1000 KRW coffee was no different from vending machines. Inspired by the fact that hand drip coffee sells at the highest price, we developed the world’s first hand drip robot."

XYZ's hand drip robot 'Baris (BARIS)'.
Photo by XYZ

Implementing ‘taste’ and ‘sensibility’ through robots is a challenging task. CEO Hwang recruited Kim Dongjin, a 15-year veteran barista famous in the industry for his Yung drip coffee, to develop an optimized hand drip algorithm tailored to each coffee bean. For example, the XYZ robot moves the water stream thickly and quickly in a spiral at the beginning of extraction to bring out the bright and complex flavors of Ethiopian Momora beans. While there was an efficient mechanism, to embed analog sensibility into the robot, it was designed to use a kettle. The robot was updated 100 times over a year to implement actions such as the barista pausing briefly to breathe while brewing coffee. The results were successful. CEO Hwang said, "At an actual Gangnam cafe, the 9000 KRW premium coffee made by the hand drip robot sold more than 100 cups a day at peak and accounted for 50% of total sales, with customers enthusiastic about it." Currently, the robots, including an ice cream robot, are used in nine stores nationwide, including Lotte World, Everland, Mapo, Seongsu, Doosan Tower in Bundang, and Aewol in Jeju. A cafe applying unmanned robots is scheduled to open at Kakao’s Pangyo new headquarters by the end of September.

Robot cafe 'Lounge X' by XYZ located in Doosan Tower, Bundang.
Photo by XYZ

Acquisition of Autonomous Driving Startup ‘Cobot’... "An Era Where Delivery Robots Are Essential in Buildings Will Come"

XYZ's unmanned robot cafe 'X Express' located in Seongsu-dong.
Photo by XYZ

To become a comprehensive service robot company, XYZ changed its former name LoungeLab and acquired the autonomous driving startup ‘Cobot’ in June. While it has focused on building unmanned stores based on F&B automation solutions so far, it plans to expand its business centered on ‘robot building solutions’ with multi-layer delivery (in-building delivery) as a key function. The mobile autonomous driving robot ‘XYZbot’ currently under development is planned to be unveiled at the Seoul Cafe Show, Asia’s largest coffee exhibition, in November this year. XYZ has also signed memorandums of understanding (MOUs) with two places, including the Busan Knowledge Industry Center, to create robot-friendly buildings. CEO Hwang said, "Just as it is hard to imagine a building without an elevator now, an era will come when delivery robots are a basic option included in buildings," expressing his ambition, "We will become a comprehensive service robot company that transforms the everyday F&B market through robots."