HSBC is creating an $880 million technology fund to provide financing to early stage companies as part of its strategic commitment to helping entrepreneurs and the new economy thrive across the Greater Bay Area (GBA).
The GBA+ technology fund will support enterprises in sectors such as e-commerce, fintech, robotics, biotechnology and healthcare technology in China, Hong Kong and Macau, pioneering a holistic approach to supporting new economy companies.
"Lending money is not the sole purpose. We want to create a lasting relationship with our customers," said HSBC's head of commercial banking in Hong Kong Terence Chiu. "We're not transactional. That's never been our strategy in 154 years."
Lending money is not the sole purpose. We want to create a lasting relationship with our customers"
The GBA+ technology fund will provide senior debt financing to companies that are likely to have received funding from venture capital or private equity firms. It aims to provide entrepreneurs that have viable business models with liquidity to finance growth rather than to fund proof of concept work in the earliest stages of a start-up's journey.
Neo Wang, co-chief executive and head of commercial banking, Guangdong at HSBC, points out the Pearl River Delta is recognized as a global innovation hub.
"The region has the largest amount of hi-tech companies among the provinces of China. At present, over 45,000 hi-tech companies operate in Guangdong, increasing by 37% compared to the same period last year. The launch of the GBA+ technology fund will help us finance innovative companies who are driving the transformation of Guangdong's economy at a crucial stage in their growth. HSBC stands alongside entrepreneurs and businesses aspiring to be the next unicorn," he said.
In 2018, the GBA was home to nearly 120 million people and had a combined gross domestic product of $1.6trn, making it larger than Australia if it were a stand-alone economy.
The number of technology customers served by HSBC's commercial banking business in Guangdong's Pearl River Delta has more than doubled over the past three years. Over 80% of new business accounts opened in Hong Kong are for start-ups that have been incorporated for less than three years. In April, the bank launched the HSBC sprint account, a new business banking proposition dedicated for start-ups and small businesses operating in Hong Kong.