LG CNS (064400) will join U.S. investment firm General Atlantic to identify and co-invest in promising companies in enterprise software and artificial intelligence. The company is tapping proceeds from its initial public offering last year to secure future growth engines. As the enterprise AI market expands rapidly, competition among major South Korean system integration firms to invest in overseas technology companies is intensifying.
LG CNS said on the 1st that it signed a co-investment partnership targeting enterprise technology companies at General Atlantic's headquarters in New York on Sept. 24. Under the agreement, LG CNS will work with General Atlantic to find and invest in companies with enterprise technology in software and AI. The size and terms of the investments will be disclosed once targets are confirmed.
"As AI accelerates innovation in how companies work, securing enterprise software that handles core business operations and data ahead of others will be an important momentum for building a foundation for future growth," LG CNS President Hyun Shin-kyun said. "Together with General Atlantic, we will secure the core business foundation that will determine future growth and combine it with LG CNS's AI transformation capabilities to create new customer value."
General Atlantic is a global growth equity firm that managed $130 billion, or about 175 trillion won, as of the end of June. It is known for injecting capital into fast-growing companies to support their expansion while pursuing long-term investment returns. It was an early investor in ByteDance, the owner of TikTok, as well as Uber and Airbnb. In software as a service, it invested in Slack and CrowdStrike, which listed on the New York Stock Exchange and Nasdaq, respectively, the following year.
LG CNS aims to draw on that expertise to find companies with high investment value that can also generate synergies with its own business. About 390 billion won secured for mergers and acquisitions through last year's listing is expected to be deployed. LG CNS expects the investments to help it secure software licenses from the target companies and broaden its revenue base. It is also targeting customer expansion, particularly in the North American market.
For General Atlantic, the tie-up offers a chance to introduce solutions from its software portfolio companies across LG Group affiliates. Software companies can grow by quickly securing major LG Group references through LG CNS.
Industry officials say that as AI technology changes rapidly, system integration units of large conglomerates have begun moving in earnest to join forces with global investment firms and stake early claims on promising companies. Samsung SDS (018260) earlier attracted 1.2 trillion won from global private equity firm Kohlberg Kravis Roberts and announced strategic cooperation that includes acquiring global companies with strong technology. Cooperation with KKR has since been expanding across Samsung Group. Six affiliates including Samsung Electronics recently invested a combined $1 billion in Helix Digital Infrastructure, an AI infrastructure platform established by KKR.
"The point to watch is which companies Samsung SDS and LG CNS will invest in," one industry official said. "Both will look for companies that can generate synergies with their own AI transformation businesses while expanding their global operations."
