April 19, 2024

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[THE INVESTOR] Korean internet giant Naver is increasing its stake in local startups, especially delivery service firms, amid its recent push for AI-based services, according to its latest financial report on Nov. 20.

The firm’s largest startup investment as of September is 35 billion won (US$32 million), worth a 5.03 percent stake, in Woowa Brothers, operator of the nation’s leading food delivery app Baedal Minjok. 

Naver founder Lee Hae-jin, who also serves  as global investment manager, currently stays in Europe to search for quality startups to invest in.

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The two firms announced the investment in November, saying they plan to adopt Naver’s AI-based voice recognition technology for taking orders via the app.

For Woowa Brothers, the funding is the third-largest following 57 billion won from China’s Hill House Capital and 40 billion won from Goldman Sachs.

Naver has also invested 34.14 billion won to acquire a 25.4 percent stake in Mesh Korea, a local logistics firm best known for its Vroong app that delivers food from popular franchise chains such as McDonald’s, Burger King and KFC here. Mesh Korea, established in 2013, has attracted more than 70 billion won funding from global investors, including 16.5 billion won from Silicon Valley-based Formation 8.

“Its search engine and online shopping are the key business pillars of Naver. The firm seems to be mimicking Amazon’s business strategy expanding its retail channels both online and offline,” an industry source said. “By adopting its own AI technology, the firm is expected to further expand its presence in the online-to-offline business that is still behind its crosstown rival Kakao.”

In the meantime, Naver’s other top startup investments include: 18.62 billion won in French high-end audio tech startup Devialet; 5.76 billion won in SoundHound, California-based audio recognition startup; and 5.63 billion won in Israel’s Innovia Technologies that develops sensors for self-driving cars.

By Lee Ji-yoon (jylee@heraldcorp.com)