Retail giant Lotte intends to stir up innovation through its newly established accelerator arm Lotte Accelerator.
“It is difficult for big firms, by nature, to achieve innovation,” Kim Young-duk, managing director of Lotte Accelerator, said at an event hosted by Startup Alliance in Korea on Jan. 11 in Seoul. “As a corporate accelerator, our role is to serve as a bridge between a large firm and startups that have very different characteristics, from business process to how they think and operate.”
Having extensive experience in both startups and a large firm, Kim believes they can create synergy when working together. “Startups can gain the firm’s large market, established channels and capital to use it as a test bed, while startups can drive innovation for the firm to grow further. We need both.”
Before joining Lotte, Kim worked at e-commerce platform Interpark. During the time he co-founded online marketplace Gmarket, which started as an in-house venture team that was later acquired by eBay in 2009 for US$1.2 billion.
Despite its short history, Lotte Accelerator has been gaining traction quickly among startups, thanks to its strong network of more than 70 affiliates that operate in almost all consumer areas. The startups can receive mentorship, business opportunities, network and resources, as well as follow-up investment opportunities from the affiliates.
Lotte Accelerator, since initiation in Feb. 2016, has sponsored around 50 startups through its flagship six-month long L-Camp Program, including success stories such as Mobidoo and Buxi. Mobidoo, a local startup that focuses on sound wave technology to provide payment and certification solutions, received a combined 1.5 billion won (US$1.39 million) last year from Lotte Members, Samsung Next, Samsung’s venture arm and Capstone Partners.
Another firm, Buxi, ride-sharing service between airports and major destinations, also received follow-up investment of 800 million won from Lotte Rental.
He added the Lotte Accelerator program is highly competitive, with over 450 startups applying for the 15 spots of the L-Camp Program, which recruits twice a year. “I think it’s popular because there is a lot of infrastructure that Lotte can offer startups,” he said.
Lotte Accelerator, however, hasn’t made a profit just yet. But Kim believes its incubating and accelerating activities have added more value to the conglomerate.
“It’s true, we are not making profits, but we are still at the early stage and there are a lot of startups that we funded that have great potential and can give us huge returns,” Kim said. “Also, it’s about the corporate image. Through Lotte Accelerator, Lotte’s reputation has improved a lot as we help and build a startup ecosystem together.”
By Ahn Sung-mi (email@example.com