Company Aims to Lead Shift to
Software-defined Robotics
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 specialising 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 platformising 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, recognising the critical importance of
standardising 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 standardising robot platforms to
significantly reduce market-entry costs, thereby enhancing operational
efficiency and fostering synergies. “Just as Android revolutionised the smartphone era, standardised 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 epitomises 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 36.2 billion USD in 2021 to 103.3 billion USD 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,” emphasised
Lee Sam-soo, Chief Strategy Officer of 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.”
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