SK Networks to Invest an Additional 20 Billion Won in Upstage, Strengthening AI Cooperation

[Financial News] SK Networks Company Limited will make an additional 20 billion won investment in Upstage Co., Ltd., a company specializing in artificial intelligence (AI). Since its first investment in 2024, it has continued to make follow-on investments as it seeks to strengthen the competitiveness of its AI business. With Upstage’s revenue growing rapidly, attention is focused on whether the expanded investment will lead to tangible business results.
According to the Financial Supervisory Service’s electronic disclosure system on the 13th, SK Networks decided to acquire 36,428 shares in Upstage for about 20 billion won. The acquisition price is equivalent to about 1% of its consolidated equity as of the end of last year. The shares are scheduled to be acquired on November 30, and once the acquisition is complete, its holdings will rise to a total of 465,075 shares. Its expected stake is 11.5%.
The investment is being made through participation in Upstage’s Series C-2 funding round. SK Networks cited strengthening its AI-related business capabilities and creating business synergies as the purposes of the investment.
After investing 25 billion won in Upstage’s Series B round in early 2024, SK Networks invested 47 billion won through a call option and 50 billion won in the Series C round this year.
The move is seen as a bid to capitalize on Upstage’s growth potential while creating synergies between its existing businesses and AI technology. It is also viewed as a strategic effort to meet corporate customers’ demand for AI adoption by combining the data-management capabilities of its data management and consulting subsidiary Encore with Upstage’s AI technology. In the enterprise AI market, key competitive strengths include not only model performance but also data management, integration with business systems and operating costs. The key will be whether the company can produce concrete results, such as launching joint services and securing paying customers.
Upstage continues to grow in scale. Its revenue last year was 24.8 billion won, up about 78% from 13.9 billion won the previous year. Compared with revenue of 4.6 billion won in 2023, it grew more than fivefold in two years. However, the company reported a net loss of 28.4 billion won last year. Turning its increased revenue into a real improvement in profitability is seen as its biggest challenge.
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