POSCO launched CHANGeUP GROUND Seoul in Gangnam-gu last year. After a year, POSCO opened another CHANGeUP GROUND in Pohang in July this year. There are more than 100 companies that are preparing to move into ‘CHANGeUP GROUND Pohang’, and they also dream of becoming unicorn companies that are comparable to Silicon Valley in the United States. The business areas span a wide range of fields. It includes machinery • materials, electrical • electronic • semiconductors, information and communication • software, bio • medical, and chemical • energy • resources. It has a solid technology that is good enough to be responsible for the technological boundary between Korea and the world. Now let’s get to know the details of CHANGeUP GROUND Pohang, the beginning for Another Pacific Valley.

l Take a look at CHANGeUP GROUND with a total area of 28,000 square meters

CHANGeUP GROUND Pohang boasts a scale of seven floors above ground and one basement floor with a total area of 28,000 square meters. It offers startup companies programs that are different from existing startup programs such as research support, investment promotion, and more. It is different in size and facilities from the incubating centers for startups so far. In particular, CHANGeUP GROUND Pohang is operated on different themes and subjects on each floor.

l CHANGeUP GROUND, the background of choosing Pohang as a base

Given its global competitiveness first, POSCO has come to the conclusion that the location is not that important whether it is in the metropolitan area or in Pohang. POSTECH is a strong supporter of CHANGeUP GROUND in AI research that requires novel materials, new drugs, and huge data centers.
In addition, POSTECH’s accumulated research results in science and technology can be important advisors and partners in solving technical problems for tenants of CHANGeUP GROUND.

After all, it is important how much higher the thinking and technology can be connected, and it is important to go one step further and have the infrastructure that can actually be implemented. Through these concerns, it has been concluded that it is optimal to set up a base for CHANGeUP GROUND in Pohang, where POSTECH is located. Pohang is a place that can be a cluster for startups as various infrastructures are already prepared for venture incubating.

The tenant company of the CHANGeUP GROUND aims to be listed not only in Korea but also in global stock markets such as the United States and POSCO has three support systems for this purpose.

①R&D and business space
CHANGeUP GROUND Pohang has a technological infrastructure that is hard to find in other venture incubating programs by utilizing the infrastructure of POSTECH, a world-class research-oriented university, including 3rd and 4th generation radiation accelerators. Through this, existing startup companies are overcoming the reality that they had no choice but to challenge only some modules such as developing new materials, processing big data, and artificial intelligence platforms.

② Completion of financial links
The reason why existing startups could not dream to challenge the global market was that it was not easy to secure funds. In order to provide an opportunity to attract investment in startups and to link with the company’s discovery of new growth projects, POSCO has been continuously investing in venture funds that are managed by excellent venture capitals at home and abroad since 2019. So far, it has invested 225 billion won and raised more than 650 billion won in funds and plans to continue to invest every year to expand the amount of investment.

③Business network support
CHANGeUP GROUND Seoul, which opened last year, and Pohang that opened in July this year, are forming a network of CHANGeUP GROUND regardless of location. In particular, since a startup network secured through the Idea Market Place (IMP) and a business network between domestic and foreign global companies have been formed, global-level cooperation would be possible if the startups have the technologies and business models.

The global growth of startup companies can be seen that they are responsible for the future of the country and region around the world. As Korea’s economic and cultural concentration is gradually deepening in the center of Seoul and the metropolitan area, if the connection between Pohang and Seoul is established and the foundation of the link to become a global company is laid, it will also be able to drive a new corporate growth model for Korea, not only fostering successful unicorn companies.

The reason why the CHANGeUP GROUND is taking on a global challenge under the slogan of ‘Another Pacific Valley’ is also the strong commitment to succeed by widening the gap with other regions by building a new business valley that can compete with the Silicon Valley of the United States.

l Leap into a global venture, Startup Support Program

CHANGeUP GROUND Pohang has various programs for tenant companies to become global ventures. The ‘Startup Support Program’, a venture company support program of CHANGeUP GROUND Pohang, consists of various support programs for these companies to make a substantial leap in four themes: Business Incubation, Market Support, Investment Connection, and Network.

l Efforts to create POSCO venture platform and venture ecosystem

POSCO created a startup ecosystem by utilizing POSCO’s industry-academic infrastructure in the promising field with active venture investment and created a win-win future industrial domain by sensing future promising industries and supporting excellent ventures for new business candidates through venture fund operation. The key is a Venture Valley, a startup ecosystem, and a venture fund for matching and supporting capital, which is promoting growth as a sustainable platform through continuous management and relationships, and discovery and support for subsequent ventures.

Venture Valley
Venture Valley aims to produce 100 POSTECH startups and two unicorn companies every year by 2030. It is expected that it will not only discover outstanding talents and research results and link them to startups, but also contribute to revitalizing the local economy by laying the foundation for discovering new growth engines. To this end, it is creating an environment where a new industry-academic cooperation system establishment, the opening of CHANGeUP GROUND, the establishment of the world’s best startup infrastructure, and POSCO’s Idea Market Place can cooperate in a virtuous circle system.

Venture Fund
In addition to the creation of a Venture Valley, POSCO is making efforts to find venture companies in the promising field and POSCO’s new growth strategy field through investment in venture funds. POSCO plans to operate the venture fund so that it can invest in the full-cycle of venture companies, from seed-stage startups to listed companies, secure profitability and minimize the risk of investment loss by utilizing excellent domestic and foreign operators, and reinvest the recovered funds to keep venture funds running in the long term.

In 2019, POSCO signed an MOU between POSCO – the Ministry of SMEs and Startups and Venture Business – Korean Venture Capital Association to create a cooperative foundation for the creation of venture funds. Since then, it has formed both seed/growth funds that invest in the promising field and strategy/CVC funds that invest intensively in the company’s new growth strategy fields, completing the basic framework of full-cycle investment. POSCO formed a fund worth more than 650 billion won with the approval of 225 billion won in nine funds operated by excellent domestic and foreign management companies, and has invested over 550 billion won in more than 330 domestic and foreign venture companies. POSCO plans to continue to invest in funds every year to expand its pool of excellent investment companies and contribute to strengthening the competitiveness of the group in major promotion projects and creating new growth engines through Value-up activities.

CHANGeUP GROUND, a cradle where startup companies can grow into global companies, will continue to open the doors to much more prospective tenants. Also, it will continue to cooperate and support the companies even after they grow enough to graduate from the startup stage so that they can keep challenging the world through this space. We ask for your interest and anticipation for CHANGeUP GROUND Pohang, the beginning of our dream of creating ‘Another Pacific Valley’ on the west coast, along with Silicon Valley on the east coast of the Pacific Ocean.

In this episode, we will introduce the Challenge With POSCO brand.

Challenge With POSCO brand was created to revitalize venture ecosystem and foster new growth industries. The department in charge operates a nurturing system that creates a startup infrastructure that enables venture businesses to conduct business and research at the same time and helps startups grow smoothly. Based on these efforts, creating the foundation for POSCO Group’s new growth businesses, creating jobs, and enhancing economic vitality is the future that the Challenge With POSCO brand is going to create.

POSCO is pushing for various projects to realize the vision of the Challenge With POSCO brand. It is also striving to find future growth engines for POSCO Group by investing in venture funds and matching businesses between POSCO Group and POSCO venture companies. Let’s take a closer look at the brand’s core businesses and the newly launched programs in 2021 one by one.

l Venture Business Incubation Center

POSCO supports startup spaces by creating incubation spaces for venture businesses, including the CHANGeUP GROUND SEOUL, a public–private partnership incubation center (Ministry of SMEs and Startups).

▲ CHANGeUP GROUND SEOUL (Yeoksam-dong), a public-private partnership startup space operated by POSCO.

The CHANGeUP GROUND SEOUL made up of seven stories above the ground and one basement floor is different in size from the existing venture startup space launched in Korea. In the meantime, many companies and universities in Korea have operated nurturing and support programs such as venture startup support programs, space provision, and investment but CHANGeUP GROUND is entirely different in scale and research support and investment nurturing programs show a different evolution in scale and systematic aspect.

▲ CHANGeUP GROUND POHANG about to be completed on July 21, 2021.

What makes POSCO’s venture incubation center ‘CHANGeUP GROUND’ special? First of all, venture businesses that have moved in aim to be listed on the global stock market, including the United States. This strategy was established to set a business direction with the goal of targeting the global market from the beginning and decided to have global competitiveness by fiercely challenging businesses and Research & Development. From platform companies to bio ventures, the business situation is getting fiercer. The business model of global companies has changed to an open growth model through venture investment and symbiosis, and it has become difficult to survive with romantic and slow-paced models such as starting a business in a garage. POSCO supports companies to succeed in challenges in these difficult situations and has three systematic support systems for venture companies. Let’s take a closer look at what kind of system POSCO has built.

① Selecting supplier from ESG perspective
The first among them is Research & Development and business space. It enables the utilization of technological infrastructures that are difficult to find in other venture incubation infrastructures. Using the infrastructure of POSTECH, a world-class research-oriented university, including the 3rd and 4th generation of radiation accelerator owned by POSTECH, new materials are developed and big data is processed. It has helped to overcome the reality that existing startup companies like artificial intelligence platforms had the only choice of challenging limited modules.

② Financial links
The reason why existing startups could not dream of challenging the global market was that it was difficult to secure funds. POSCO has established investment-related conditions and raised venture funds with a total of 800 billion won to ensure that venture businesses are not restricted in terms of research size with insufficient energy and funds needed to attract investment. It plans to invest 400 billion won in promising fields and another 400 billion won in new growth domains by utilizing excellent domestic and foreign operators.

③ Business Network support
Including POSCO CHANGeUP GROUND SEOUL which opened in 2020, it is currently forming a CHANGeUP GROUND network regardless of location. It has also formed a business network with startup networks secured through Idea Market Place (IMP) and global companies in Korea and abroad so that there is no problem with global cooperation if only technology and business models are in place. Such infrastructure will be of great help not only to venture businesses but also to open collaboration and global expansion of POSCO Group’s various businesses.

In addition, POSCO has been providing technical support and expanding the business scale by directly participating in various projects promoted by venture companies, as well as a venture business nurturing platform and idea discovery since 2021. The challenge of Challenge With POSCO continues until the day when it succeeds by widening the gap with the startup craze in China and other regions!

l Industry-Academic-Research cooperation eco-friendly energy projects to foster venture business and contribute to carbon neutrality

POSCO, POSCO Chemical, and POSTECH are proceeding with eco-friendly solar energy production projects with Gyeongsangbuk-do Province, an energy platform startup ‘H Energy’, and battery ESS business startup ‘PMGROW’ and it is a project of industry-academic-research cooperation.

This project is a business that installs solar energy modules on the rooftops of private buildings of residents in Gyeongsangbuk-do Province and sells eco-friendly energy produced from the modules.

Once the project is on track, POSCO will be able to reliably purchase solar energy needed to achieve carbon neutrality. POSCO’s Global Quality & Service Management Office supports research on weight lightening of energy modules using Giga steel, high tensile steel, and high corrosion-resistant steel and is also pushing to supply “Posmac.”

Gyeongsangbuk-do Province plans to provide low-priced electricity to vulnerable groups in the region by utilizing a portion of the generated energy revenue. The plan is to contribute to revitalizing the local economy, creating jobs, and welfare for low-income groups and the data generated from power platforms will be processed worthily by POSTECH’s AI analysis and used to build the data ecosystem of Gyeongsangbuk-do Province.

l Development of battery standard model for eco-friendly small and medium-sized electric vehicles

The next business to introduce is cooperation in lightening battery packs for eco-friendly electric buses and automobiles. This business is in partnership with PMGROW, an electric vehicle service platform startup. It is pushing to replace low-priced steel plates or aluminum-based electric vehicle battery cases with high-quality steel materials. In particular, it is planning to propose the shape and steel of optimal battery pack case in line with the battery pack performance enhancement bill that is to be revised from July 2021.

With the technical cooperation between the two companies, PMGROW expects to extend the usage time and lighten the weight by increasing battery capacity and reducing the cost compared to Al. The first goal is to apply in new electric buses that will be released in the first half of 2022. In particular, the completion ceremony of the PMGROW’s mass production plant was held in the next-generation battery regulation-free zone located in Pohang, and it signed an NDA with POSCO for the development of lightweight battery packs under the supervision of the Automotive Materials Marketing Office. It is also planning to develop batteries that will be used for electric vehicles, electric bikes, and small electric vehicles in the long term.

▲ At the signing ceremony of NDA for co-development of lightweight batteries with PMGROW on July 5th.

PMGROW also participated as an angel investor in POSCO Capital and if its corporate value increases by continuously strengthening its competitiveness, it can contribute to POSCO’s profit generation.

We took a look at new programs that POSCO is launching with the goal of Challenge With POSCO. I am so excited that there are a lot of interesting programs and I am looking forward to it. Until the day when the startups fostered and supported by POSCO become decacorn companies beyond unicorn companies, POSCO’s challenge will continue in 2021!

A brand created to revitalize the venture ecosystem and foster new growth industries, Challenge With POSCO! POSCO will continue to carry out activities that create a foundation for new growth businesses, create jobs, and enhance economic vitality.