HSBC has launched a $1 billion Asean Growth Fund to help scale up "platform players" in the region’s digital economy.
The aim is to help digital firms achieve economies of scale and grow their asset portfolios. The fund is aiming to support "new-economy names", established corporates and non-bank financial institutions by "assessing operating metrics tied to their cashflow-generative asset portfolio, rather than relying solely on traditional financial metrics", a media release said.
In Asean, the London-headquartered global bank has a presence in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, and the fund will be looking to support businesses in these countries, a spokesperson told FinanceAsia.
The bank has already helped several digital players in recent years with significant financing. Deals have included an expanded $100 million debt facility for consumer finance digital platform Atome Financial in the Philippines in August 2023. Earlier this month, HSBC agreed a $100 million credit facility with the Akulalu Group, a bank and digital platform group with operations across Indonesia, the Philippines, Thailand and Malaysia.
Separately, HSBC has set aside $150 million to provide financing to early-stage, high-growth companies in Singapore that are backed by venture capital or private equity investors.
“Like so many other internationally minded businesses, we are excited about Asean’s booming digital economy,” said Amanda Murphy, head of commercial banking for South and Southeast Asia (SEA) at HSBC, in a statement. “With a working population that is digitally native, increasing in size, and poised to consume more goods and services – especially on e-commerce – Asean has so much potential for growth.”
Murphy added: “The introduction of our latest offerings allows us to better support new-economy companies in Asean, whether they are start-ups or scale-ups, as they expand across the region and advance along the corporate lifecycle.”
Digitalising operations
SEA's digital economy is among the world’s fastest-growing and was worth around $218 billion in 2023. It is expected to reach a value of $600 billion by the end of this decade – with a compound annual growth rate of 16%.
HSBC recently surveyed 600 companies operating in SEA and found that 42% said that “digitalising operations” is their top business priority. This was followed by “growth in SEA”, at 40%, while 37% of businesses said “research and development” is their top priority.
65% of respondent said they plan to increase their investment in the digitalisation of their businesses, and as Asean's economies integrate further, 66% said they want to expand into new markets within SEA.
