Hong Kong: Alibaba fund makes first investments in 3 startups including delivery service app GoGoVan

People walk at the headquarters of Alibaba in Hangzhou, Zhejiang province, April 23, 2014. REUTERS/CHANCE CHAN/FILES

Alibaba’s Hong Kong Entrepreneur Fund, which maintains a corpus of $1 billion targeting entrepreneurs based in Hong Kong has made its first investments into three startup ventures in the city.

These startups are delivery service app GoGoVan, e-commerce platform provider Shopline and designer apparel rental platform YEECHOO. Shanghai-based Gobi Partners is the investment manager.

GoGoVan enables users to connect directly to delivery service providers, Shopline functions as a DIY e-commerce platform that permits merchants to establish their own online shop.

Notably, YEECHOO is less mature compared to other two and is still developing its product. These entrepreneurial ventures will be able to access the capital to build their business base in mainland China, leveraging on Alibaba’s e-commerce platforms and services.

A major appeal of the fund for entrepreneurs, as as well as a differentiator, is the focus on Hong Kong ventures and Alibaba’s positioning as a strategic partner, with the ability to access the mentorship of the funds directors.

Qualifying startups must maintain a Hong Kong base, possess the potential to expand abroad, must be developed using Alibaba’s e-commerce platform and with the founders being Hong Kong permanent residents.

Commenting on the investment, Joseph Tsai, executive vice chairman of Alibaba Group and board director of the fund said, “I’m happy we can see this kind of innovation in Hong Kong. That sense of passion and hope for the future is something we want to encourage – and we’re willing to put capital behind it.”

In an interaction with the South China Morning Post, which Alibaba owns a stake in, Cindy Chow, executive director of the fund, shared that each investment would see Alibaba acquire between 20 to 30 per cent of each venture, with the aim of remaining a minority shareholder and the capital invested subject to commercial negotiations. Returns from each startup would be re-invested back into the fund.

Chow explained: “We don’t have a set target. For this first batch of investments, the total amount … as a percentage of the HK$1 billion fund, it’s talking about a small portion. If we can provide a platform for them to grow within our whole ecosystem, both sides will benefit from our cooperation. The partnership can make the whole ecosystem more robust.”

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