Hyundai Motor eyes acquisition of Korean lidar-free self-driving startup 42dot

Hyundai Motor is considering increasing its stake in, or fully acquiring, the South Korea-based lidar-free autonomous mobility platform 42dot, the latest signal of its growing interest in the fast-growing space.

A spokesperson of 42dot told TechCrunch that the startup is in talks with Hyundai Motor, but cautioned that terms including stake size and deal valuation hadn’t materialized yet. Hyundai Motor did not immediately respond to requests for comments.

Hyundai currently owns a 20.4% stake in the three-year-old startup, whereas 42dot’s co-founder and chief executive Chang-Hyeon Song, who interestingly also leads the transportation-as-a-service (TaaS) team at Hyundai Motor, held a 36.19% stake as of December 2021, according to 42dot’s regulatory filing. The rest is owned by venture capital firms and strategic investors, including LG Electronics, SK Telecom, Lotte Rental, CJ Logistics and LIG Nex1.

The ongoing deliberation signals Hyundai Motor’s accelerating efforts to strengthen its autonomous driving technology that is in line with the Korean automaker’s grand plan to invest $79 billion (95.5 trillion WON) through 2030 into autonomous driving software technology and electric vehicle-related businesses. Hyundai Motor, which has said it aims to secure 7% of the global electric vehicle market by 2030, earmarked $9.2 billion (12 trillion WON) for connectivity and autonomous driving software investment.

The news comes nearly nine months after 42dot raised $88.5 million in its Series A financing round at a valuation of about $425 million to accelerate its TaaS service and urban mobility operation system (UMOS).

South Korean local media Korean Economic Daily first reported the news, citing anonymous sources, that Hyundai is in talks to invest at least 400 billion WON (~$306.4 million) in 42dot. According to the newspaper, Hyundai approached 42dot for the acquisition in June. The proposed deal could be completed this month, the paper said.

Founded in 2019 by former Apple, Microsoft and Naver alum Song, 42dot has developed Akit, a self-driving software and hardware solution, and TAP, an autonomous mobility and logistics platform that offers a number of services across ride-hailing, fleet management, demand-responsive transport, smart logistics and more.

Korean autonomous driving startup 42dot bags $88.5M Series A to accelerate its growth

42dot, a South Korea-based autonomous Transportation-as-a-Service (TaaS) startup, announced today it has raised $88.5 million (104 billion WON) in a Series A round of funding to advance its urban mobility operating system (UMOS).

The Series A brings the startup’s total raised so far to $130.1 million. The company valuation is now estimated at $425 million (500 billion WON), a source familiar with the matter said. A spokesperson at 42dot declined to comment on the valuation. 

The latest funding included participation from new investors like Shinhan Financial Group, Lotte Rental, Lotte Ventures, STIC Ventures, We Ventures, DA Value Investment, and others. Returning backers also joined the Series A round, but the spokesperson did not provide their information. South Korea’s several big conglomerates, including Hyundai Motor, Kia Motors, LG Electronics, SK Telecom and CJ Logistics, invested in the company’s $42 million pre–Series A in September 2019.   

The Seoul-based company will use the proceeds to advance its AI-based technology, establish joint ventures and hire staff. It has 200 employees as of October, the spokesperson noted. The company also plans to expand its business through investment and M&A, based on its statement. In July, 42dot signed a memorandum of understanding (MOU) with South Korean financial firm Shinhan Capital to develop a mobility financial service.

42dot was founded in 2019 by CEO and co-founder ChangHyeon Song, who is also Head of TaaS team at Hyundai Motors. In April, the South Korea-based automaker set up a new TaaS division to strengthen its mobility strategies. 

The lidar-free self-driving company developed an autonomous driving software and hardware solution, AKit, which uses only two types of sensors such as cameras and imaging sensor radar to perform all aspects of sensing the environment surrounding the autonomous vehicle. 

42dot also built full-stack autonomous mobility and logistic platform called ‘Tap!’ that offers a raft of services across ride-hailing, fleet management, demand-responsive transport, smart logistics and more. 

The company’s two core solutions, Akit and Tap!, are expected to commercialize in 2023. Its clients will be primarily autonomous carmakers and mobility platform operators, the spokesperson said. 

“In the future, cities will be operated under a federated fully autonomous, self-managing, self-healing logistics and transportation infrastructure. The new infrastructure will provide a much more optical and cost-effective way to move people and goods,” Chang noted in its press kit.