Hyundai Motor invests W22.5b in Mesh Korea for last-mile technology

Hyundai Motor has invested 22.5 billion won ($20 million) in Mesh Korea, a logistics service provider that runs the brand Vroong, the company said Wednesday.

The decision is a part of efforts to secure a new growth engine, the company said, citing the last-mile logistics technology Mesh Korea has developed. 

Hyundai plans to apply its autonomous and connected car technologies to Mesh Korea’s delivery vehicles, with an aim to develop unmanned delivery services in the future. Last-mile technology refers to a logistics system that searches for the fastest way to deliver products in the final step of the delivery process, typically from a distribution center to the end user. Hyundai Motor Group’s logistics arm Glovis will also participate in smart logistics solution development with Mesh Korea, the company added.

Established in 2013, Mesh Korea provides an algorithm-based last-mile delivery service. The algorithm named Vroong Engine is designed for high logistics efficiency for clients by applying mathematics to the cost and risks of delivery services. It has more than 13,000 motorcycle drivers for the delivery service, targeting the growing mobile commerce market.

Separately, the Korean carmaker has invested in a Chinese last-mile logistics startup, Inmotor. The size of the investment was not disclosed. Inmotor is a sharing platform of batteries used for delivery vehicles. The startup’s role is to maximize efficiency by analyzing data in real time, such as deliverymen’s anticipated driving routes, battery capacity and availability of charging stations nearby.

Batteries function as a network to inform drivers of the nearest location of charging stations via smartphones. The Chinese company has around 500 battery charging stations in 16 major cities. The service is provided on a regular payment basis, the company said.

The investment came amid the growing food delivery market here. Last-mile logistics in Korea is expected to grow from 15 trillion won this year to 20 trillion won next year.

By Cho Chung-un (christory@heraldcorp.com)