LG Electronics, a one-time leader in the mobile phone industry, has announced the acquisition of Cybellum, an Israeli automotive cybersecurity-focused company that detects and assesses vulnerabilities in connected vehicle devices and hardware. Cybellum does this with an approach termed the “digital twin” approach.
LG Electronics, earlier this year, announced the shutting down of its mobile phone business. The company is gearing towards other endeavors and ambitions and its latest interest in Cybellum shows that LG Electronics is interested in the next-generation automotive hardware and services. Best known for their home appliances, LG Electronics quit the mobile business because it failed to establish a brand in the smartphone industry according to reports. Since then, the company has been seen trying its hands on new things.
The Korean tech giant mentioned that the deal with Cybellum will come in several parts. LG will initially take a 64 percent stake, valued at $140 million, in Cybellum. The tech giant will then provide $20 million in form of a Simple Agreement For Future Equity (SAFE) note as soon as the trading process is concluded in the fourth quarter. What’s left of the shares will be acquired in the “near future” – no date specified, which is when the final valuation and investment will be confirmed.
From expert calculations, in total, the deal could be worth about $240 million dollars if the valuation remains consistent. It is pertinent to know that market forces among other factors could have an impact on this.
LG Electronics has been showing interest in the automotive industry and associated sectors for a while now and its acquisition of Cybellum is its way of venturing into that industry. “It’s no secret the critical role software plays in the automotive industry and with it comes the need for effective cybersecurity solutions. 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”, President of LG Electronics vehicle component solutions company, Dr. Kim Jin-yong said.
Cybellum was founded in 2016 by Slava Bronfman and Michael Engstler. The duo was part of the Israeli Defense Forces. Cybellum will continue to work with the companies that it already has partnerships with and will continue to operate as an autonomous identity, Slava Bronfman revealed.
Speaking about the deal with LG, Slava Bronfman said that, “this is first and foremost a security investment. Cybellum is a cybersecurity company. As one of the leading automotive suppliers, LG is prioritizing cybersecurity as they understand that it’s an essential part of the current era of connected vehicles and the transition toward autonomous vehicles”. He also added that “LG is not currently a partner of Cybellum’s”.
Initial integration between the two companies is expected to begin by next year.