Startups need a bolder vision, says Alibaba Entrepreneurs Fund’s Cindy Chow

Alibaba Hong Kong Entrepreneurs Fund (AEF) executive director Cindy Chow at DEALSTREETASIA's Asia PE-VC Summit 2018 in Singapore.

If there is one thing that entrepreneurs in Hong Kong could improve on, it is to have a bolder vision for the company, said a top executive of Alibaba Hong Kong Entrepreneurs Fund (AEF).

“I guess the vision of the startups is very important. Hong Kong is a small market – so it’s important for entrepreneurs in Hong Kong to have a bigger vision. They can go across the border to tap into the mainland market or Southeast Asia market and other parts of the world,” said AEF executive director Cindy Chow.

Launched in 2015 by Chinese internet giant Alibaba Group, AEF is a non-profit initiative to invest in startups and help them tap into global markets through the Alibaba ecosystem. It has two chapters – Hong Kong and Taiwan, with an investment corpus of HK$1 billion ($130 million) and NT$10 billion ($320 million), respectively.

In a conversation with DEALSTREETASIA at Alibaba’s Hong Kong office, Chow said over $40 million of the $130-million Hong Kong fund has been deployed, with over 20 portfolio companies under its belt.

Two of the fund’s portfolio companies are unicorn startups – Hong Kong-based logistics startup GoGoVan and fintech startup WeLab. The former merged with its Chinese peer 58 Suyun in 2017 and raised a $250 million round last July to further its business expansion in China.

WeLab, on the other hand, has secured an online banking licence from the Hong Kong Monetary Authority in April to access the retail banking sector and will be rolling out its services in the next six to nine months. It is said to have delayed its $500-million IPO and may consider raising capital via a new private funding round.

Chow noted that the fund will continue to focus on plugging the Series A and B funding gap in Hong Kong.

“Since we started the fund we’ve seen that funding for Series A and B is where the gap is. Seed and pre-Series A are supported by family offices and individual investors because the check size is relatively small. For our portfolio, it ranges between seed and Series C but over 50 per cent of our investments come in during Series A. That is what we want to do for Hong Kong by focusing on the funding gap,” she said.

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