Targeting early-stage entrepreneurs, the third fund of Hyundai Motor Group’s corporate venture capital arm, ZER01NE, was formed Monday. The fund has a fund size of 125 billion won ($91.4 million), and it is overseen by billionaire Euisun Chung.

Hyundai stated that ZER01NE, which stands for “Zero One,” will be used to invest in strategic fields such artificial intelligence, robotics, cybersecurity, and energy technologies, including hydrogen energy. The new funding, which is referred to as Fund III, comes from ten of Hyundai’s twenty-eight major affiliates, including Kia Corp., Hyundai Motor Securities, logistics company Hyundai Glovis, and auto parts producers Hyundai Wia and Hyundai Mobis.

In a statement regarding the launch, Keith Noh, vice president and head of the ZER01NE group at Hyundai Motor Group, said, “This fund reinforces the Group’s position as a leading strategic investor in transformative technologies.” “We hope to create significant synergies among our affiliates and expedite our future-ready business initiatives by strengthening our partnership with creative startups.”

ZER01NE has invested in approximately 105 startups through its two prior funds, Fund II (worth 80.5 billion won) and Fund I (10 billion won). The company says that these investments have resulted in “over 200 collaboration cases” inside the wider Hyundai group. Noh cited EV battery pack remanufacturer Poen as an illustration of this kind of cooperation. Poen has acted as a partner for the group’s battery warranty or general repairs, supported by ZER01NE’s first investment. By 2024, the firm had completed 1,500 warranty repairs for 12 different Hyundai cars.

ZER01NE was first established in 2018 as a “creative talent platform” for Hyundai, which the automaker at the time referred to as “an amalgam” of CVC and “open innovation.” In addition to its investment funds, ZER01NE runs a startup accelerator that has so far worked with 195 businesses. Even though their ideas might not be immediately applicable to Hyundai, accelerator graduates are eligible for funding based on criteria including their growth potential and long-term cooperation opportunities.

In an email to Forbes, Noh noted, “A company’s survival depends on innovation, and achieving this innovation requires the best talent.” In the past, businesses relied on their own employees to spur innovation, but today, working with outside talent is crucial to a company’s existence. According to this viewpoint, ZER01NE has been functioning as an open innovation platform since its inception with the goal of drawing in the greatest potential.

Among ZER01NE’s holdings are Seoul-based MakinaRocks, which creates machine learning platforms for industrial processes, and Clobot, an autonomous robot constructor that had its Kosdaq debut last October. Other significant CVCs, such as LG Technology Ventures and Applied Ventures, a division of the Nasdaq-listed manufacturing behemoth Applied Materials, participated in MakinaRocks’ most recent $10 million fundraising round in 2020.

With the launch of Fund III, Hyundai continues its 15-year venture investing legacy. Hyundai originally introduced its CVC division, Hyundai Ventures, in Silicon Valley in 2011. Six years later, in 2017, the firm renamed this division as Hyundai CRADLE, or the Hyundai Center for Robotic-Augmented Design in Living Experiences.

CRADLE has five offices worldwide, including bases in Berlin, Beijing, and Singapore, whilst ZER01NE mostly operates in Korea. Furthermore, CRADLE also operates as a fund of funds, in contrast to ZER01NE, which makes direct investments in startups. The $200 million fund launch of Factorial Funds, a Menlo Park, California-based venture capital firm that was an early backer of AI behemoths Anthropic and Perplexity, included it as an anchor investment with Kia in January.

A number of well-known Korean conglomerates have entered the venture capital market in recent years. New companies including Hyosung Group’s Hyosung Ventures and GS Holdings’ GS Ventures were established in 2022 as a result of the government’s 2021 relaxation of the rules governing the establishment of CVCs. The Ministry of Trade, Industry, and Energy of South Korea stated in 2023 that 42 companies had joined a CVC Alliance, with the goal of building a fund pool of more than 8 trillion won ($5.7 billion) by 2025.

One of Asia’s biggest tire manufacturers by sales, Hankook & Company Group, created its own CVC earlier in May with a capital investment of 15 billion won ($10.7 million). The CVC, called Hankook & Company Ventures, will fund businesses in the AI, robotics, and other deeptech industries from seed to Series B, according to Hankook & Company.