In­vestor ap­petite for tech rises

Singapore Business Review - - FINANCIAL INSIGHT: VENTURE CAPITAL -

De­spite the rather in­con­sis­tent re­gional and global eco­nomic per­for­mance and out­look, Hong Kong re­mains a vi­tal fi­nan­cial and com­mer­cial hub for Asia and the Pa­cific. This is true in the ven­ture cap­i­tal scene in the spe­cial ad­min­is­tra­tive re­gion — which can be con­sid­ered as a mi­cro­cosm of the rest of the re­gion. “The Hong

Kong ven­ture cap­i­tal scene con­tin­ues to be strong when com­pared with the rest of Asia,” notes Padraig Walsh, Part­ner at Bird & Bird Asia Pa­cific. “Many ven­ture cap­i­tal­ists in Hong Kong also look to in­vest in other ju­ris­dic­tions in Asia and do not limit them­selves to the Hong Kong mar­ket, mean­ing that Hong Kong is still very much a hub for pan-asian VC in­vest­ment.”

Alex Norman, an as­so­ci­ate for Bird & Bird Asia Pa­cific, adds that in terms of hot sec­tors, tech­nol­ogy ver­ti­cals re­main very pop­u­lar with in­vestors, par­tic­u­larly in fin­tech. For in­stance, re­ports es­ti­mate that Hong Kong in­vest­ments in fin­tech amounted to $165m last year, from the $125m in 2015. “Hong Kong’s prox­im­ity to man­u­fac­tur­ing bases in main­land China has also made it a pop­u­lar des­ti­na­tion for com­pa­nies in the [In­ter­net of Things] space,” he adds.

2016 VC deals

Some of the more suc­cess­ful ven­ture cap­i­tal deals last year are in fin­tech. The Hong Kong Ven­ture Cap­i­tal and Pri­vate Eq­uity As­so­ci­a­tion notes that We­lab, a fin­tech com­pany founded in 2013, raised $165m in in­vest­ments in its 2016 Se­ries B round. Another deal is Hong Kong travel tech­nol­ogy startup Tink Labs rais­ing $125m in a new round of fund­ing from FIH Mo­bile Lim­ited to scale its idea of a des­ig­nated mo­bile de­vice pro­vided with the ho­tel room for guests to use for free, elim­i­nat­ing the need to buy lo­cal SIM cards to makes calls, send mes­sages, and use data.

Other deals in­clude AM730 Startup Fund’s in­vest­ment of over HK$10M in the P2P di­a­mond ex­change; Hori­zons Ven­tures’, a pri­vate in­vest­ment arm of busi­ness mag­nate and cur­rently Hong Kong’s rich­est man Li Ka-shing, of $15m to Ger­man in­sur­ance tech­nol­ogy startup Friend­surance; and Credit China Fin­tech Hold­ings, a

Hong Kong-based firm, en­ter­ing into a $30m agree­ment and in­vest­ment in Bit­fury, a lead­ing bit­coin and pri­vate blockchain in­fra­struc­ture provider and trans­ac­tion pro­cess­ing com­pany. Walsh said that th­ese deals show how “in­vestors con­tinue to have a strong ap­petite for tech­nol­ogy-based com­pa­nies.

Asia Pa­cific start-up and early-stage PE in­vest­ments

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