LG invests $60m in AI-driven autonomous service startup Bear Robotics

LG invests $60m in AI-driven autonomous service startup Bear Robotics

Published: 12-03-2024 07:49:00 | By: Pie Kamau | hits: 1713 | Tags:

LG Electronics (LG), has executed a stock purchase agreement to acquire a stake in Bear Robotics, a prominent Silicon Valley-based startup specializing in AI-driven autonomous service robots, through an investment of $60 million.

Rather than seeking short-term returns, this strategic investment is aimed at bolstering LG's portfolio for long-term growth. Upon closing the stock purchase, the company will hold the largest portion of shares in Bear Robotics on a single-shareholder basis.

William Cho, CEO, LG Electronics: "In the service robotics market, we're focusing primarily on areas such as delivery and logistics. However, we are carefully considering future directions, keeping open the possibility of equity investments or mergers and acquisitions."

Founded in 2017 under the leadership of CEO John Ha, a former Senior Software Engineer and Technical Lead at Google, Bear Robotics has gained recognition for its AI-powered indoor delivery robots catering to markets in the United StatesSouth Korea and Japan. The company boasts a team of skilled engineers, including its co-founder and CTO, with backgrounds in prominent tech companies. Notably, Bear Robotics is drawing attention for its expertise in platformizing service robotics software, robot fleet management technology and cloud-based control solutions.

LG is preparing for a transition towards Software-defined Robotics (SDR), a shift from hardware to software emphasis, similar to what has been observed in the mobility industry. In anticipation of future growth, the company is committed to developing scalable service robots on an open architecture software platform so that it may cater to a variety of environments, recognizing the critical importance of standardizing AI-based autonomous robot platforms. With this understanding, LG views this strategic investment as a pivotal opportunity to propel its robot business capabilities.

With years of experience in the robot business, LG has accumulated expertise in deploying robot solutions across various commercial spaces such as airports, hotels, restaurants, hospitals, retail stores, museums, smart warehouses and golf courses. LG operates a facility dedicated to the production of service robots at the LG Future Park in Gumi and boasts world-class capabilities in management of quality, supply chain and customer services.

By combining Bear Robotics' world-class R&D talents and software platform expertise with its own strengths, LG aims to spearhead efforts in standardizing robot platforms to significantly reduce market-entry costs, thereby enhancing operational efficiency and fostering synergies.

John Ha, CEO, Bear Robotics: "Just as Android revolutionized the smartphone era, standardized open platforms are essential for the activation of the robot market.''

In recent years, LG has strategically reallocated resources towards high-growth sectors for the future, aligning with market dynamics and the strategic significance of its business models. The investment in Bear Robotics epitomizes LG's dedication in accelerating the advancement of its service robot sector, a pivotal component of its future growth strategy.

LG has been nurturing its robot business as one of its future core pillars. From the deployment of guide robots at Incheon International Airport in 2017, it has progressively introduced tailored solutions for diverse commercial settings, encompassing delivery and disinfection functionalities. Since the preceding year, LG has actively pursued expansion into international markets including the United StatesJapan and Southeast Asia.

The service robotics market is expected to experience rapid growth, propelled by the rapid advancement of technologies such as AI and communication. On a global scale, the market is anticipated to grow from $36.2 billion in 2021 to $103.3 billion by 2026.

Last year, LG unveiled its Future Vision 2030, outlining its goal of evolving into a Smart Life Solution Company that can seamlessly connect and expand customer experiences across various domains, including home, commercial, mobility and virtual spaces. Aligned with this vision, LG aims to achieve the 'Triple Seven' goal: an average growth rate and operating profit of seven percent or more, alongside an enterprise value translating into an EBITDA ratio of seven.

Sam-soo Lee, Chief Strategy Officer, LG Electronics: "As the service robot market enters a period of growth, this equity investment will significantly contribute to securing a 'Winning Competitive-edge' for the company. From a mid- to long-term perspective, we will seek to develop our robot business into a new growth engine, exploring various opportunities through the integration of cutting-edge technologies such as Embodied AI and robotic manipulation."

www.lg.com