[Exclusive] Hyundai Motor Group Doubles Startup Investment Funds to Strengthen Future Leading Technologies...

ZER01NE 3rd Fund Aims for Launch in First Quarter This Year
Fund Size Doubled to 150 Billion KRW
Expanded Investment Collaboration with Group Affiliates Including Hyundai Steel and Glovis
Securing Advanced Technologies Through Startup Nurturing and Investment
Building a Mobility Ecosystem Through Collaboration with Creative Talents

Hyundai Motor Group is more than doubling its investment capital in startups to accelerate open innovation. This year, the group plans to establish a new ZER01NE 3rd fund at the group level and discover promising startups with innovative technologies to create a mobility ecosystem. This move is seen as a strategic step to strengthen the acquisition of future technologies.

According to the financial investment industry on the 6th, Hyundai Motor Group is pushing forward with the establishment of the ZER01NE 3rd fund, which invests in startup new technologies. The expected fund size is 150 billion KRW, with the goal of setting it up within the first quarter of this year.

ZER01NE is an open innovation platform created by Hyundai Motor Group in 2018 with the goal of building an ecosystem for creative talents. It discovers and invests in startups that possess creative and innovative technologies. Beyond simple investment, it provides networks for global expansion and helps secure business viability through collaboration with Hyundai Motor Group.

The 3rd fund stands out as it has more than doubled compared to the 1st fund (10 billion KRW) established in 2018 and the 2nd fund (74.5 billion KRW) set up in 2021. The 1st fund was solely funded by Hyundai Motor, while the 2nd fund was jointly established by financial institutions such as Korea Development Bank and Shinhan Bank, along with some affiliates including Hyundai Motor, Kia, and Hyundai Motor Securities.

The reason Hyundai Motor Group is increasing the size of the 3rd fund to more than twice the previous amount is to comprehensively secure future advanced technologies through startup investments. Looking at the startups that the ZER01NE fund has invested in or collaborated with so far, there is a large presence of next-generation new technologies such as artificial intelligence (AI), semiconductors, resource recycling and low carbon, and quantum computing technologies.

Another difference with the 3rd fund is that Hyundai Motor Group is solely raising the capital without financial sector contributions. Major affiliates such as Hyundai Steel, Hyundai Glovis, Hyundai Wia, and Hyundai Rotem are lending their support. The investment targets are expected to include not only technology startups related to finished vehicles but also startups that create synergy with various businesses of the affiliates.

Since 2018, ZER01NE has invested in over 100 startups based on their commercialization potential. Over the past eight years, ZER01NE has collaborated on projects with 144 startups through its startup nurturing program, ZER01NE Accelerator, and has made equity investments in 107 of them. Recently, from 2023 through this year, it has participated for three consecutive years in CES, the world’s largest electronics and IT exhibition, showcasing the innovative technologies of its invested startups to the global market.

Looking at the investment portfolio, it includes the robotics industry with companies like Clobot (intelligent robot service company), Flotic (logistics robot solutions), and Holiday Robotics (general-purpose humanoid robot manufacturer), as well as semiconductor-related industries such as Boss Semiconductor, a vehicle semiconductor startup, and Made, which produces silicon carbide components. Additionally, battery-related industries that Hyundai Motor Group is interested in include EvaCycle, a company providing recycled battery solutions, and Pit-in, which offers used battery subscription services for commercial electric vehicles.

Furthermore, Hyundai Motor Group has spun off 36 startups as independent companies through its in-house startup program. Companies selected as in-house startups receive up to 300 million KRW in initial development costs and undergo a one-year commercialization review and verification process to decide on spin-off. Spin-off startups receive equity investments of about 100 million KRW, and to reduce the burden on employees, re-employment opportunities are offered for up to three years.

Once the 3rd fund is established, investments are expected not only in artificial intelligence (AI), robotics, ESG (environment, social, and governance), and batteries but also in startups in logistics, manufacturing, and defense industries. A group official emphasized, "We will continue innovation based on open innovation using the ZER01NE platform and create synergies with group companies."