South Korean auto conglomerate Hyundai Motor Group has launched a new fund that invests in promising startups in future growth sectors such as artificial intelligence (AI), robotics, and hydrogen.

The initiative aims to overcome the limits of in-house research and development (R&D) and gain new business ideas through collaboration with startups.

Hyundai Motor Group announced on Monday that it held a founding general meeting for the ZER01NE Fund III on Wednesday in Seoul.

The fund, totaling 125 billion won ($91.3 million), will be jointly managed and planned under a co-general partner (co-GP) structure.

Hyundai Motor Co. will invest 40 billion won, Kia Corp. will invest 40 billion won, and Hyundai Motor Securities Co. will invest 10 billion won.

Seven other group affiliates - Hyundai Mobis Co., Hyundai Glovis Co., Hyundai Wia Corp., Hyundai Rotem Co., Hyundai AutoEver Corp., Hyundai BNG Steel Co., and Hyundai Capital Services Inc. - will also invest in the fund.

“We will generate synergy across our affiliates and accelerate our future business expansion by collaborating with startups in innovative technology sectors such as AI, robotics, and energy,” said Noh Kyu-seung, head of the ZER01NE team at Hyundai Motor Group.

Hyundai Motor Group plans to identify and invest in early-stage startups in Asia, including Korea, Japan, and Southeast Asia, with a focus on future business and technology areas such as AI, robotics, hydrogen, and cybersecurity.

The conglomerate also plans to foster various forms of collaboration between its affiliates and the startups in which the fund invests.

“Large corporations are increasingly engaging in open innovation investments, where they provide funding to early-stage startups in need of capital, while gaining access to the startups’ creative ideas,” said an industry insider.

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