Alphonso

History

2025: LG makes corporate takeover of Alphonso

In November 2025, the founders of Alphonso filed a lawsuit against the South Korean conglomerate LG Electronics. They accuse LG of corporate business capture and demand compensation in excess of $1.5 billion, as well as the application of triple fines under the state criminal code California

According to PPC, Alphonso has developed a special content recognition technology (ACR) for smart TVs. By 2022, the startup's annual income was more than $270 million. LG Electronics showed interest in the purchase, as the corporation's own advertising business on the Smart TV platform brought in less than $10 million a year.

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Фото: Reutres

In December 2020, LG's subsidiary Zenith Electronics acquired a 55% stake in Alphonso for $78 million. During the negotiations, the founders achieved conditions to protect their rights. Those terms included the right to buy back shares by market value between 2024 and 2026, the ability to claim an IPO, three board seats and veto power over transactions between LG and Alphonso.

In the summer of 2022, LG management initiated a plan to dismiss all founders and deprive them of their representation on the board of directors. In December 2022, four LG directors voted to fire all seven founders. According to PPC, in 2024, the Delaware court found these layoffs unlawful and restored the rights of the founders.

In parallel, the plaintiffs' complaint alleges, LG began profiting from Alphonso through imposed changes to the advertising inventory agreement. In 2024, the corporation demanded a review of the pricing principles, threatening to terminate the contract. Under pressure, the board of directors approved an amendment that limited Alphonso's margin to 15%, and sent all super-profits directly to LG. As a result of this manipulation, according to PPC, citing information from the plaintiffs, LG earned about $100 million in 2024 alone.^[1]

2021: LG Electronics bought Alphonso

In early January 2021, LG Electronics announced the acquisition of a controlling stake in Alphonso, a company that develops data analytics software. LG Electronics intends to use Alphonso solutions and its own technologies in the development of the Smart TV line.

LG will invest about $80 million to buy almost 60% of Alphonso, which was tentatively valued at about $125 million. Shares of current investors, including Manifest Investment Partners, will be bought out by LG as part of the deal, with the remaining shares held by Alphonso's founders, current and former employees of the company, and various advisers. The deal provides LG with the option to acquire the remainder of Alphonso over the next three to five years.

LG Electronics acquires Alphonso

LG Electronics has been providing consumers with its own free ad-enabled streaming service, called LG Channels, since 2016 and will continue to make efforts to improve consumer services, said Edward Lee, director of LG's webOS advertising business group in Seoul. - The purpose of the acquisition is to use Alphonso software, data analytics and media planning capabilities in LG home entertainment products, mainly smart TVs, as well as to better meet the needs of users when interacting with content.

Alphonso Chief Executive Ashish Hordia does not expect LG's investment to impact Alphonso's work with other TV makers, in part because Alphonso will continue to operate as an independent subsidiary, adhering to privacy retention provisions.

The merger with LG Electronics will provide Alphonso with the support of one of the world leaders in home entertainment products with access to a huge number of connected television screens. We will be able to maximize our mutual impact on the television market and combine our technologies to benefit the entire ecosystem, "added Hardia.[2]

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