By Dean Takahashi, @deantak
Read full article on VentureBeat at https://venturebeat.com/ai/lg-nova-puts-startups-in-touch-with-tech-giants-resources/
LG is one of the world’s biggest tech companies, but it is making efforts to stay in touch with the innovations of startups with its LG NOVA incubator program.
The LG Electronics North American Innovation Center (LG NOVA) kicked off in the fall of 2021 with a pledge to pour $20 million into companies accepted for the accelerator. And it recently showcased a set of new startups at the Eureka Park exhibition at CES 2023. This kind of activity can bring in fast-moving technologies such as generative AI into one of the world’s biggest companies.
Sokwoo Rhee, corporate senior vice president of innovation at LG Electronics and head of LG NOVA, said in an interview with VentureBeat that the company sifted through more than 2,400 submissions (up from 1,300 submissions the first year) before choosing the companies that it believes are advancing a better way of living while improving the planet.
This means it supports technologies for sustainable living, eco-friendly products and an inclusive society. All told, about 40 startups are in the second class, up from 10 in the first year.
“The general philosophy is what is called ‘outside in,'” said Rhee. “I think about a lot of corporate innovation and how it is organized. And what they want to do is usually is add more value to their existing business. And that’s how they work with startups.”
He added, “In our case, yes, we want to add value to our business. But by creating new business with startups. So it’s a little different if you think about it. Traditionally, startups come in to help the business of the corporation. In our case, we want to co-create. We want to actually brainstorm and create complete new businesses that LG may or may not be even in right now. So that is the core difference. And our philosophy is there are a lot of intelligent people and intelligence experts out there. We want to work with those experts.”
The companies can get up to $100,000 for a joint product or concept development, plus resources and potential investments from LG Electronics, LG Display and other LG NOVA affiliates that could total in the millions of dollars. And they get a chance to collaborate with LG for potential opportunities to develop multi-million-dollar engagements as new businesses within LG’s global innovation portfolio.
The average check size is about $2 million, though that often comes in the form of multiple checks. The company reserves dry powder to help fund the same startups in their subsequent rounds. At some point in the future, LG might consider acquisitions. But that is a ways off.
“We are not necessarily looking at technology at the moment for technology’s sake,” he said. “Our goal is very clear. We want to create whole businesses. So when we work with startups, we want to see whether those startups have business expertise or a business mindset. Are they really the business partners that we can work with? Initially, you start with technology. But then after a while, they start looking how do they can actually create a real business and generate revenue.”
That means the focus isn’t just solely on early-stage companies.
Post-pandemic investing
Rhee said the LG NOVA focused on startups in the digital health, metaverse, gaming, ESG, electric mobility, smart lifestyles and other categories.
Rhee noted that there are more than four million new companies that have been created since the beginning of the pandemic, a sign that innovation is still growing strong, even if the inspirations for it have changed.
Articles continues on Venturebeat.com at https://venturebeat.com/ai/lg-nova-puts-startups-in-touch-with-tech-giants-resources/