Gaule: Give a brief description of what you do, the purpose of your venture fund and when it was formed.
Suh: Hyundai Ventures is Hyundai Motor’s US corporate venturing and partnering office in Menlo Park, California. Hyundai Motor invests from its balance sheet. It opened its corporate venturing operations in Korea in 1999 and launched Hyundai Ventures in January 2012. We focus on making strategic investments in start-ups with technologies, products or capabilities with the potential to be applied in the car or in a car-related function or service.
Gaule: How do you seek and vet those opportunities? Suh: We are fortunate to be located in Silicon Valley so we have a tremendous amount of opportunity with companies and start-ups developing technology with a lot of interest in automotive. Silicon Valley has over time – the past 15 years – developed quite an automotive community with research and development offices. Our process, having found these companies in various ways, involves two major steps.
The first is to look at the technology – what is the intellec- tual property, how does it apply, where does it fit within our technology or product roadmap? If we think there is some fit we will assess how ready it is for the automotive market. Sometimes that involves a paper study. We review patents and interview the founders and technologists. Sometimes it involves a project which could range from a few months to a year. Whatever the case, the technology assessment is a fairly key part before going to the next step.
If we feel there is enough technology for Hyundai Motor we will go into the investment analysis, which is proba- bly more of a traditional look at the investment size, how much equity we want, who the co-investors are, how much funding the company will need over time. Finally we go to the management executive approval board for review and approval.
Gaule: Do you tend to lead the deals?
Suh: We tend to follow or syndicate or both. In one invest- ment we were the only investor and the reason was that we felt this company had a lot of application in automotive and it was important for us strategically to have more of a tempo- rarily exclusive access to the company and the technology.
Gaule: Give a brief overview of your team and your partners.
Suh: We have quite a lot of diversity. Most have a technical background – degrees in science or engineering. Others have MBAs. In addition, the extended team, those based in Korea, have had long careers in other departments at Hyundai Motor. They have significant experience in development, product engineering, testing or manufacturing.
We have many partners internally and externally. Internally it ranges from design to marketing to product planning to product development to research. Externally, we have a variety of partners ranging from financial venture capital- ists, corporate venturers, academic institutions, standards development organisations, local business networking groups, plus small, medium-sized and public companies.
Gaule: What are your focus areas for deals?
Suh: We have four themes. One is convergence of mobile devices, internet, wireless communication and automotive. Another is clean-tech for automotive and transportation. This ranges from basic materials that go into structural or non-structural components, including power semi-conductors, battery technology, energy surge technology in general, motor technology and anything to do with management of electrified vehicles. A third theme is intelligent systems – anything that makes something smart. The fourth involves new business models for personal mobility and product development or smart enterprise. These four areas are not mutually exclusive.
Gaule: What has been your most interesting recent deal?
Suh: We invested in a wireless power technology company where we were the only investor. As we were doing the technical assessment we realised that the capability of the company could go into both the lower power applications – for example, charging devices for mobile devices in the car – but they also had the technology to scale it into perhaps tens of kilowatts of power.
Gaule: What is your view on the current market conditions for starting a new venture?
Suh: I am very excited overall. The one area that is a little bit harder to come by is energy storage technology. There are developments in larger companies, but the start-up area is not as active as in 2007-08. But overall there is more oppor- tunity than my team can digest at the moment. So there is a lot of opportunity for Hyundai Motor for months andmonths to come. We have a long view about the automotive and personal mobility industry. Market conditions impact short-term strategy for any venture. But we believe the long- term needs in automotive and personal mobility mean the outlook for new ventures is positive.
Gaule: How do you measure the performance of your venture unit, both the financial and strategic benefit you deliver?
Suh: Our key metrics are about how our portfolio companies are engaging with or going into product development. It is not necessarily about going into production, as that is a much longer timeframe than anyone has patience to measure, but you can measure design wins. We use a combination of design wins – internal and external – new strategic partner- ships or working relationships. In the long run we are looking at return on investment and estimated cost savings.
Hyundai Ventures is one of the organisations being visited as part of the Corven Networks Innovation and Venturing programme in California, February 10-14, 2014.
You can get free previous audios of Gaule’s Question Time at the iTunes store – search Corven Group – and as audio downloads from Global Corporate Venturing or from www. corven.com/corven-networks.
To contact Andrew Gaule and for future interview ideas email andrew.gaule@corven.com and tlewis@globalcor- porateventuring.com