Investor appetite for tech rises
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