Hong Kong is a hub for startups and innovation. With over 3000 startups in 2021 alone, the city is quickly becoming a global leader in the tech industry.
Funding is a constant concern that keeps many local entrepreneurs from reaching their full potential. Fortunately, there’s also many individuals and groups looking to invest in new ideas. So what are some of the options available for startups looking to secure funding?
In this article, we explore some of the options available to startups for early-stage and growth funding in Hong Kong, including seed accelerators, individual angel investors, and angel investor groups for early-stage funding.
We’ll also touch on the various venture capital firms in Hong Kong that offer different funding rounds for growth-stage funding.
Let’s get started!
Early Stage Funding
Seed accelerators are startup incubators that offer funding in exchange for equity. The idea is to provide young companies with the resources they need to get off the ground, including mentorship and networking opportunities.
Let’s look at five notable seed accelerators in Hong Kong.
LimeHK is an acceleration program that offers seed funding to startups in the digital or technology industry that have some traction.
LimeHK program includes mentorship, direct investment, financial advisory, legal consultation support, and business development.
Program length: 3 to 6 months
Funding amount: USD 100,000
Zeroth is an accelerator program for machine learning and artificial intelligence companies in their early stages. The program provides funding, mentorship, network, and discounted online tools, including popular online tools such as Amazon Web Services, Google Cloud, Digital Ocean, Microsoft, Hubspot, and SendGrid.
The Zeroth program has five phases: kick-off, remote, demo-day prep, demo day, and continued support. These phases give startups the flexibility to grow while getting maximum support from the program.
Program length: 3 months
Funding amount: USD 120,000
Supercharger is a fintech accelerator program for start-ups in categories such as blockchain, crowdfunding, and asset or wealth management programs.
The program offers funding, publicity, workspace, mentors, events, and workshops. The program also helps businesses to identify joint venture opportunities.
Program length: 3 months
Funding amount: Unknown
Brinc provides various paid accelerator programs across different verticals. Here are some Brinc Hong Kong programs:
- Blockchain: A virtual program called Launchpad Luna for startups in the NFT and blockchain space. Funding amount ranges from USD 250,000 to USD 500,000.
- Alternative Protein: A virtual program for startups developing new food processes that will replace food products from animals. The expected funding amount provided is USD 130,000.
- Food Technology: A virtual program with a focus on startups developing processes to fix the broken food system. The program fee is USD 30,000, and the expected funding amount is USD 130,000.
- Healthcare: A program that funds startups that are developing technologies that will improve the health industry. The funding amount is USD 130,000, and the program fee is USD 30,000.
- CleanTech & Sustainability: A funding program for startups that are building products aimed at improving environmental sustainability. The investment amount is USD130,000, and the program fee is USD 30,000.
Program length: 3 months
Funding amount: Varies
Betatron is a venture capital firm that invests in B2B startups building products in various sectors. The special focus is on companies that specialize in maritime, logistics, e-commerce, health tech, and sustainability & adaptation.
Betatron team also offers support in business issues such as hiring, legal, design, and business development.
Program length: 3 to 6 months
Funding amount: USD 250,000 to USD 2M
Angel investors, also known as angel funders, are high-net-worth individuals who invest in early-stage companies. They invest in companies in exchange for equity.
To get funding from an angel investor, you need to know how to pitch your business effectively.
Usually, you need to go through a formal process where you present your idea to them, explain the market opportunity, and discuss why you’re the perfect person to lead this venture forward.
Here are some of the well-known angel investors in Hong Kong.
Alex Banh is the managing partner of IPV capital, with extensive experience in venture capital and internet business. His main focus is in assisting early-stage businesses in China, and has served as the Chairman of the Asia Regional Advisory Board since December 2018.
Carman Chan is the founder and managing partner of Click Ventures. Click Ventures invests in startups in consumer internet, mobile, and SaaS industries. Carman is also the vice-chairman of the Hong Kong Business Angel Network.
Melissa Guzy is the managing partner and founder of Arbor Ventures. Arbor Ventures invests in the Big Data, FinTech, and Digital Commerce industries. Melissa has previously invested in various startups, including iWatt and Pure Digital, the latter of which was acquired by Cisco.
Richard Chan is the managing partner of Berkeley Frontier Fund and Iron Fire Ventures. Iron Fire Ventures invests in startups in enterprise software, artificial intelligence, marketplaces, and consumption upgrades categories.
Tytus Michalski is the managing partner of Fresco Capital. Fresco Capital invests in early-stage businesses in the technology industry.
Angel Investor Groups
Angel investor groups are bands of investors who pool their money together to invest in startups. The goal of an angel investor group is to help entrepreneurs get funding for their startups.
Here are five angel investor groups for Hong Kong startups.
Angel Investment Network Hong Kong
Angel investment network Hong Kong has over two hundred thousand active investors. To get funding, entrepreneurs should to follow these steps:
- Register as an entrepreneur
- Create a pitch
- Publish your pitch
- Connect with investors
- Accept funds
There are four plans on the site with varying rates, shown below.
Venture Investors Alliance of Hong Kong (VIA)
VIA is a group of active angel investors interested in funding businesses in the information & technology, cleantech, health care, and financial technologies sectors.
The leaders of VIA are business executives with track records:
Nisa Leung is the managing partner of Qiming Ventures Partners, and she is also a board member for several organizations such as Nurotron and Zai Laboratories.
Jon Bond is CEO of Bond Ventures and has 20 years of experience in financial services. Jeffrey Cheung has investment and management experience in various industries, and he is the founder of Crossgate Advisors Limited.
Frederick Demopoulos was a senior executive at The News Corporation and Netease. Andrew Teoh was Head of Corporate Finance at Alibaba Group, and he co-founded Ikaria Capital Limited. Denis Tse has 15 years of experience in fund investment and private equity.
The Indus Entrepreneurs (TiE)
TiE is a non-profit venture founded in 1992 by senior professionals, business entrepreneurs, and corporate executives. TiE funds business in all industries and stages and has five foundational programs: mentoring, funding, incubation, education, and networking.
Big Bloom investors are always looking for businesses of all industries to invest into. Big Bloom has a simple five-step process that entrepreneurs should follow to get funding.
- Send a pitch via email or using the online form on the website
- If your pitch is accepted, you will be asked to present a business plan
- If the investors like your business plan, a meeting will be set
- Complete due diligence form
- Sealing the deal – signing term sheets and funds transfer
Hong Kong Business Angel Network (HKBAN)
HKBAN was founded in 2010 and is an investment matching platform for university start-ups. HKBAN holds investment matching groups every two months where start-ups present their business plans for the chance to be selected.
The network has several partner groups including but not limited to the Hong Kong Design Centre, Hong Kong ICT Awards, and The University of Hong Kong.
Growth Stage Funding
Growth stage funding mostly comes from venture capital (VC) firms, where VC firms typically invest in companies that have a product or service with some early customers. There are often multiple rounds of funding offered by VC firms.
The first round is seed funding followed by series A, B, and C. Seed funding is critical for early financial support that helps companies to finance activities like product development and market research, where series A to C funding is for companies that are past the development stage and are looking to take their businesses to a higher level.
Let’s look at some of the venture capital firms that offer growth stage funding in Hong Kong.
Apax Partners has been around for over 50 years funding business in the tech, internet, consumer, healthcare, and services sectors. Apax firm seeks to inspire teams, support transformation improvements, and accelerate growth in new companies.
Apax has invested in a number of tech companies such as T-Mobile Netherlands, Coalfire Systems, and Azentio.
Golden Gate Ventures
Golden Gate Ventures was founded in 2011 and has funded over 60 companies since. The company invests in businesses that offer technology products and services, including B2B SaaS services and apps.
Golden Gate portfolio includes companies spread across many countries like Stripe, AngelList, and Tradegecko.
Nova Founders Capital
Nova Founders Capital is an investment company that invests in businesses in the financial services sector. The company has partnered with investment firms such as Stem Financial and the Pacific Century Group.
Nova has invested in companies such as StartechAsiam Edirect, and the Compare Group Asia.
Founded in 2013, Vectr funds entrepreneurs looking for seed to series A rounds of funding. Vectr provides support beyond funding to businesses through their studio and growth teams, such as commercialization support and product development.
Some of the notable Vectr investments include Accern, Dirty Labs, and Paradigm.
MindWorks Ventures funds businesses that create new ecosystems looking for Series A and B funding. The company has an investment team of 8 investment professionals and a management team of five professionals.
MindWorks has invested in companies such as ABC fintech, Dolphin, Chain of Demand, and PanexWD International.
Finding the right investment partner and package is often a matter of weighing different options. As a business owner, you should look at what types of investors you prefer working with, as well as which type of investor can best support your needs, and consider the right amount of funding you think you need to take your business to the next stage.
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