HSBC launches $880m tech fund in China’s Greater Bay area

A man walks past a logo of HSBC outside a branch at the financial Central district in Hong Kong, China June 2, 2015. REUTERS/Bobby Yip/File Photo

In a move to support fast-growing tech companies, HSBC has launched a $880-million fund focused on China’s Greater Bay Area of Guandong, Hong Kong and Macau, it said in a statement on Tuesday.

The fund, GBA+ Technology Fund, will provide senior debt financing to high-growth companies in sectors including e-commerce, fintech, robotics, biotech and healthcare technology.

According to HSBC, the startups will need to have a viable business model and have received backing from venture capital or private equity firms, but are at an early stage in their development. An SCMP report added that HSBC will not take equity as part of the financing.

“Technology firms often have different business models and access to different forms of funding, so we are adapting the way we do business to better meet their needs,” said HSBC co-chief executive and head of commercial banking for Guangdong, Neo Wang.

In 2018, the bank has set up dedicated teams in Guangdong and Hong Kong to support tech companies in the Greater Bay Area, giving HSBC greater insight into the ambitions of high-growth businesses and the support they need, from managing foreign exchange to raising capital.

“We are committed to supporting the next generation of leading companies, helping them expand nationally and internationally,” said HSBC head of commercial banking for Hong Kong, Terence Chiu.

HSBC added that the Greater Bay Area of China has a population of China, with a $1.5 trillion combined GDP in 2017. The region is expected to hit $4.6 trillion GDP by 2030. The Guangdong province alone already houses over 45,000 tech firms.

Shenzhen, which is hailed as the Silicon Valley of China, is located within the Greater Bay Area. The city is also home to several largest tech giants in China including DJI, Tencent and Huawei.

Two years ago, in an effort to encourage investment in local innovation, the Hong Kong government had launched a HK$2 billion ($260 million) Innovation and Technology Venture Fund to co-invest alongside venture capital firms. In 2015, Hangzhou-based internet giant Alibaba Group had established a HK$1 billion ($130 million) fund to invest into startups with a Hong Kong nexus.