Young minds behind the new age start-ups have always fascinated industries around the globe. In the automotive space especially, this ecosystem was the early adopter of the whole concept of sustainable mobility.
Besides innovative ideas, these start-ups also provide a great platform for traditional OEMs to enter the new age of mobility.
Likewise, Hyundai Motor Company has stated its plans to secure future innovative growth engines by establishing cooperative relationships with various select start-ups worldwide while supporting and nurturing their global advancement.
The group will continue its bold collaboration strategies with diverse start-ups that will transform the future based on creative ideas. Open innovation areas that are newly sought include Software Defined Vehicles (SDVs), resource circulation, semiconductors, artificial intelligence (AI), and quantum technology.
During the Open Innovation Tech Day event in Seoul recently, the group announced that it had invested KRW 1.3 trillion (about $1 billion)in more than 200 start-ups since 2017 until the first quarter of 2023, when it began strengthening its open innovation activities. These investment numbers exclude major investments, such as Boston Dynamics, Motional, and Supernal.
Hyundai's Open Innovation initiative is largely embodied in four types of investment: sensing investment to identify trends in fast-changing new growth business areas; linked investment to promote actual cooperation according to expected strategic synergy; strategic investment to immediately or quickly secure business capabilities, and company building for internal start-ups with necessary technologies and business areas for the group.
It has invested in numerous business areas, including electrification, connectivity, AI, autonomous driving, renewables, robotics, and mobility services. By segment, mobility services recorded around KRW 700 billion (about $550 million) in investment in projects, including mobility service companies such as Grab in Singapore and OLA in India. Electrification and connectivity followed with KRW 280 billion (about $220 million) and KRW 126 billion (about $99 million), respectively. The group has also investedKRW 60 billion (about $47 million)in AI, KRW 54 billion (about $42 million)in autonomous driving, and KRW 25 billion (about $20 million) in energy, including hydrogen.
The group operates global innovation hubs called ‘CRADLE’ in five countries: the United States, Germany, Israel, China, and Singapore. It has also established ‘ZER01NE’ in Korea, which serves as a hub for open innovation. Additionally, the group operates 19 investment funds in major countries, focusing on securing global investment capabilities to support start-ups.
In addition, the group also operates an in-house start-up system called ‘ZER01NE Company Builder’, which is available for executives and employees of group companies to foster in-house start-ups. A total of 30 in-house start-ups have spun off, generating cumulative sales of KRW 280 billion (about $220 million). These start-ups have been recognised for their market value and business feasibility, leading to hiring of more than 800 new employees.
Dr Yunseong Hwang, Vice President and Head, Open Innovation Execution Group, Hyundai Motor Group, noted that start-ups that can lead to positive changes in people's lives through innovative technologies or services are the companies that the group is looking for.
Relation Building
ZER01NE, established in 2018, has recruited start-ups through its accelerator programme to discover valuable start-ups and explore the possibilities of strategic use cases of their innovative technologies. It has also expanded its open innovation initiatives to various areas beyond automobiles, operating its ZER01NE Playground for collaborations with artists and creators.
ZER01NE laid the foundation for global expansion by introducing ten domestic start-ups in cooperation, including 60 Hertz, eMotiv, ArgosVision, and CellPlus Korea. The group will continue to leave no stone unturned in its pursuit of the best and most innovative technologies to develop sustainable mobility solutions and benefit humanity.
At the Open Innovation Tech Day, Hyundai Motor Group also presented its major cases of investments and collaboration with key start-ups that have grown through the ZER01NE programme.
IONITY, the European EV high-speed charging infrastructure company, is a representative example of the results of the group's investment. As of the end of 2022, around 450 charging stations have been built in 24 European countries, with approximately 2,000 high-speed chargers installed. Hyundai Motor is collaborating with IONITY by providing a package that enables IONIQ 5 customers to use the company’s charging facilities for one year and provides equity investment.
Rimac Automobili, the Croatian ultra-high-performance electric vehicle company invested in by Hyundai Motor Group in 2019, has established a cooperative relationship. The company has experienced rapid growth, with a corporate value of € 2.2 billion. Rimac Automobili has contributed to the advancement of high-performance electric vehicle technology at Hyundai Motor and Kia through various joint projects.
IonQ, a US quantum computing company well-known in Korea due to its association with Professor Kim Jungsang of Duke University, has conducted various joint research projects with Hyundai Motor Group since receiving investment from the group in 2021. These projects include upgrades to autonomous driving and battery technology.
SoundHound, a US voice recognition solution company, received investment from the group between 2011 and 2020. The company provides voice recognition services that feature in Hyundai, Kia, and Genesis models sold in North America and India.
Suresofttech is a company in Korea to succeed in developing and commercialising software verification technology. Hyundai Motor invested in the company in 2012 and 2017 and is conducting software verification collaboration on vehicle controllers and connected car systems. Based on its collaboration with Hyundai Motor Group, Suresofttech has grown into a global technology company, expanding its business to various fields such as nuclear power, defence, rail, and aviation.
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