LG to Acquire Israeli Vehicle Cybersecurity Risk Assessment Solution Provider Cybellum2021.09.23
Deal Helps LG Develop More Secure Auto Software, Enhance Growing Vehicle Components Business and Allows Cybellum to Expand Security Solutions to Global Customers
SEOUL, Sep. 23, 2021 — LG Electronics’ (LG) board of directors has approved the acquisition of Cybellum, a leading vehicle cybersecurity risk assessment solution provider. The deal allows LG to assume an approximate 64 percent stake in the tech company valued at USD 140 million, a strategic move that will enhance LG’s cybersecurity capabilities and accelerate its efforts to become an Innovation Partner for Future Mobility.
Remaining shares will be acquired in the near future with the final valuation and total investment amount to be confirmed at that time. On top of this initial investment, LG committed to a simple agreement for future equity (SAFE) to invest an additional USD 20 million in Cybellum upon conclusion of the trading process in the fourth quarter.
Founded in 2016 in Tel Aviv, Cybellum is a leading vehicle cybersecurity company with about 50 employees and is currently collaborating with key industry players, successfully delivering its products to vehicle manufacturers and suppliers worldwide. In addition to Israel, Cybellum has operations in Japan, Germany and North America. Cybellum will remain an independent entity and brand, continuing to grow and support its customers and partners with the same commitment level and standards to which Cybellum customers have become accustomed.
With the number and type of cybersecurity threats on the rise and the global automobile industry transitioning to the connected car era where secure connectivity is essential, the need for better vehicle cybersecurity that meets international standards has never been greater. Vehicle cybersecurity will only become more important over time as cars evolve into organically connected systems with complex interrelationships between their various components. Cybellum will enable LG to preemptively secure a sustainable growth engine in the rapidly growing automotive cybersecurity industry and deliver more value in key areas such as parts design, development and operation by optimizing software security.
One of Cybellum’s most advanced solutions to protect vehicles from cybersecurity threats is its Cyber Digital Twins platform. Cyber Digital Twins creates a detailed representation of a vehicle’s software components without accessing the source code and automatically exposes any risks that could potentially be exploited. The platform relies on real-time threat intelligence feed to check for vulnerabilities and delivers a full assessment of those vulnerabilities as well as providing recommended solutions.
The first acquisition for LG in Israel and the cybersecurity domain, this investment underscores the importance of this growing category and is a key part of LG’s strategy to strengthen its business portfolio through strategic acquisitions, alliances and partnerships, with a strong focus on its vehicle components business. In August 2018, LG acquired Austria’s ZKW Group, a leading player in the automotive lighting market. In July, LG launched a joint venture with Magna International, the world’s third largest auto supplier, to create LG Magna e-Powertrain, boosting the competitiveness and future growth potential of both partners.
“We’re excited about this partnership with LG and the great return we’ve been able to deliver to our stakeholders,” said Slava Bronfman, CEO of Cybellum. “Cybellum has developed the most comprehensive product security management offering in the industry and joining forces with LG will enable us to further accelerate the realization of our vision. We expect to grow significantly in the near future.”
“It’s no secret the critical role software plays in the automotive industry and with it comes the need for effective cybersecurity solutions,” said Dr. Kim Jin-yong, president of the LG Electronics Vehicle component Solutions Company. “This latest deal will further strengthen LG’s solid foundation in cybersecurity, enabling us to be even more prepared for the era of connected cars.”
Founded in 2013, LG’s VS Company recorded sales of USD 5.18 billion in 2020, a 6.1 percent increase over 2019. Through its investment in vehicle cybersecurity, LG is committing to increasing the competitiveness of its infotainment systems, electric vehicle powertrains and vehicle lighting capabilities, the three pillars of the automotive component industry.