Company Aims to Lead Shift to Software-Defined Robotics
SEOUL, South Korea, March 11, 2024 /PRNewswire/ — LG Electronics (LG) is making a strategic investment move to expedite the advancement of its capabilities in service robotics, a key new business area of the company.
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 USD 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.
At CES 2024, LG’s CEO William Cho had discussed such potential equity investments, stating, “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 States, South 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.
Leading the Shift to Software-Defined Robotics and Enhancing Synergy in Robot Business
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. “Just as Android revolutionized the smartphone era, standardized open platforms are essential for the activation of the robot market,” remarked Bear Robotics CEO John Ha.
Charting a Course for Future Growth in the Service Robotics 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 States, Japan 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 USD 36.2 billion in 2021 to USD 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.
“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,” emphasized Lee Sam-soo, chief strategy officer at LG Electronics. “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.”
About LG Electronics, Inc.
LG Electronics is a global innovator in technology and consumer electronics with a presence in almost every country and an international workforce of more than 74,000. LG’s four companies – Home Appliance & Air Solution, Home Entertainment, Vehicle component Solutions and Business Solutions – combined for global revenue of over KRW 84 trillion in 2023. LG is a leading manufacturer of consumer and commercial products ranging from TVs, home appliances, air solutions, monitors, automotive components and solutions, and its premium LG SIGNATURE and intelligent LG ThinQ brands are familiar names world over. Visit www.LGnewsroom.com for the latest news.
SOURCE LG Electronics