Venture capitalist Tom Loverro predicted an impending mass extinction event for early and mid-stage companies last year, forecasting that the years 2023 and 2024 would surpass the impact of the 2008 financial crisis on startups. According to PitchBook, over 3,200 startups worldwide closed last year, resulting in more than $27 billion in lost investment funds. Despite this global crisis, South Korean startups are garnering attention for their technological prowess, acknowledged by major domestic IT giants and honored with the CES Innovation Award. ChosunBiz conducted interviews with some of these startups to explore their distinguishing factors. [Editor’s Note]
Major global automakers have recently reduced their focus on developing autonomous driving technology due to the lack of tangible results despite significant investments, leading to doubts about the feasibility of fully autonomous vehicles, particularly amid ongoing accidents. However, China presents a different outlook. The country continues to invest in autonomous driving and actively seeks to secure related technologies, including LiDAR. LiDAR, short for ‘Light Detection and Ranging,’ employs laser beams to create a 3D map of the surroundings, providing precise spatial data to machines and computers. Chinese companies have already surpassed the United States and Japan in the number of patent applications related to LiDAR, with a total of 25,957 applications.
Vueron Technology is gearing up to seize these opportunities by venturing into the Chinese market later this year. Founded by three developers, including Joseph Kim, a former researcher at Hyundai Motor, the startup has attracted over 10 billion won in total investments since its establishment in 2019. Notable investors include Naver, Bon Angels Venture Partners, and the Korea Development Bank. Specializing in providing LiDAR-based object detection software for Advanced Driver Assistance Systems (ADAS), known as ‘VueOne,’ to major global automotive OEMs and tier 1 suppliers, the company is well-positioned for growth.
According to Yole Intelligence, the global LiDAR market for automotive is projected to skyrocket from $332 million in 2022 to $4,650 million in 2028. Chinese OEMs are at the forefront of this surge, propelling the adoption of LiDAR in their vehicles. Unlike their EU or US counterparts, who typically limit LiDAR to the F segment, Chinese OEMs are integrating LiDAR into cars in the D segment. These vehicles are more cost-effective than those in the F segment, leading to a significant uptick in both car production volume and LiDAR integration.
Vueron Technology has showcased its technological expertise over several years. In 2020, they demonstrated the viability of autonomous driving with just one LiDAR sensor, securing the world’s first autonomous driving license from South Korea’s Ministry of Land, Infrastructure, and Transport. By 2022, they successfully completed autonomous driving over a 616-kilometer distance in California, also utilizing only one LiDAR sensor. Building on these accomplishments, they have established corporate entities in Silicon Valley and Munich, Germany, to broaden their global market presence. The U.S. subsidiary alone already contributes 30% to the company’s overall revenue.
In an interview with ChosunBiz on Feb. 22, Kim shared his plans to increase efforts in securing additional mass production contracts this year. He said, “Discussions are ongoing with a global parts manufacturer, facilitated by our German subsidiary.” Kim also hinted at the possibility of announcing positive developments related to this in March.
Regarding entry into the Chinese market, he said, “We are initiating discussions through Japanese trading companies, with whom we are currently collaborating on various business ventures.” Kim emphasized the company’s commitment to exploring “diverse avenues of opportunity.”
Vueron Technology introduced a new product, ‘VueOne+,’ at CES 2024. What distinguishes VueOne+ from its predecessor?
“VueOne+ features the advanced deep learning network ‘VueNet.’ In simple terms, it offers superior cognitive performance compared to VueOne by utilizing a more complex network. Vehicle software suitable for mass production often relies on simplified deep learning networks because of its inherent limitations. As a result, it’s challenging to claim that most products have high object detection performance. This was also the case with VueOne. While it could detect objects at a distance, its ability to classify whether the object was a car or not was somewhat lacking. However, VueOne+ has made significant improvements in these areas, including its ability to distinguish individuals among dense crowds.”
What were the initial feedback from attendees?
“The feedback was overwhelmingly positive. Few companies can demonstrate real-time object detection results through live vehicle demos. Many expressed surprise, asking, ‘Is this genuinely happening in real-time?’ and noted the rarity of misinterpretation or failure to recognize. A Japanese OEM company that has been partnering with us even expressed interest in scaling up the existing collaboration project with VueOne+.”
When will VueOne+ be ready for actual application in ADAS?
“We are currently working on streamlining VueOne+ for mass production. Due to the integration of a more intricate deep learning network compared to the previous model, it consumes slightly more power than the optimal level for mass production. Once we reduce power consumption, we plan to integrate VueOne+ into the ADAS systems used by our existing partners within the first half of this year.”
If you were to secure mass production contracts with VueOne+, it appears that your revenue would increase significantly. How has your revenue been trending so far?
“In 2022, our sales amounted to 400 million won, followed by 1 billion won in 2023. For this year, we anticipate sales slightly exceeding 6 billion won. As we primarily focus on software development, we don’t expect rapid revenue growth in the short term. Before starting the business, we underestimated the time required for software validation and expansion. [Laughs] However, the positive development is that since last year, sales haven’t solely relied on service contracts but also on the sale of software copies. The target sales for next year and the year after are 15 billion won and 50 billion won, respectively.”
Vueron Technology has ventured into developing LiDAR-based object detection software for markets beyond ADAS. Could you please provide further details into this initiative?
“While navigating the challenges of growing the company during the lengthy validation period for ADAS, we developed ‘VueTwo,’ a smart city infrastructure solution. Unlike ADAS, which relies on LiDAR sensors in moving vehicles, VueTwo utilizes fixed LiDAR sensors in a single location, making its technology less complex than that of VueOne. This difference allows VueTwo to excel in performance compared to other products.
As a matter of fact, one of the technologies integrated into VueTwo recently received the Innovation Award at CES 2024. However, we believe this recognition is largely influenced by the increased focus on safety following the Seoul Halloween crowd crush incident. Two districts in Seoul have already implemented this technology, and the remaining 23 districts are considering adoption. We are also in talks with numerous domestic companies, including local governments and international airports, all of whom have expressed keen interest in adopting VueTwo. Currently, it’s fair to say that approximately half of our revenue comes from VueTwo.”
Are you planning to explore overseas markets with VueTwo?
“Yes, indeed. To achieve that, we signed an MOU with Salvi, a Spanish smart infrastructure company, last year. Salvi’s main operational areas are Europe and Africa, so we anticipate entering these regions first. In Europe, there is a tendency to prioritize local companies, so having partners like Salvi can be of great assistance.”
Given the multitude of tasks at hand, it seems like a busy but enjoyable period. What are your plans moving forward?
“We are planning to secure an additional investment of 15 billion won in the first half of this year to acquire more talent as we prepare for a listing targeted for 2026.
In the autonomous driving market, concerns primarily revolve around companies developing vehicles at level 4 or higher autonomy. Delays in achieving fully autonomous driving have raised revenue concerns among these companies. However, those focusing on level 2 and level 3 vehicles are prioritizing mass-producing ADAS and making steady progress. In this context, Vueron Technology sees numerous opportunities to grow and expand by accumulating references.”