HSBC has announced increased support for Hong Kong and mainland China’s “innovation economy” by extending its start-up and specialist tech lending facility from $1.8 billion to $3 billion.
The expanded capacity will offer lending to firms based in Hong Kong and mainland China that are active in the climate tech, industrials, consumer, technology, healthcare and life science sectors. It follows initial launch of a similar facility in 2019 under two separate financing schemes aimed at supporting technology and healthcare ventures in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).
The enlarged and renamed HSBC New Economy Fund aims to support businesses throughout the full breadth of the growth cycle, from series A stage fundraising through to pre-IPO and even after listing, Thomas Elliott, HSBC’s head of client coverage for Hong Kong Commercial Banking, told FinanceAsia.
To date, the fund has supported businesses including financial platform Micro Connect; logistics business, LalaMove; biotech firm, Prenetics; and mobile tech firm, Mobvista, he confirmed.
Asked whether he could disclose details of the loan terms, Elliot said, “We take an involved and bespoke approach to structuring facilities, adopting a lifecycle approach that seeks to understand and back companies early-on in their growth and evolution, bringing our strengths and expertise to support our clients’ unique needs, ” adding that any sustainable financing considerations would be discussed and decided on a case-by-case basis.
Venture debt launch
The news comes alongside the establishment of the bank’s first venture debt capabilities in Hong Kong.
“Our venture debt solutions allow us to provide early-stage businesses with bespoke debt financing solutions, potentially available over a number of years, with the option of including equity warrant instruments within the lending structures,” Elliot said.
Equity warrants are securities that give the holder to right buy shares in the company at a future point in time.
In the release, head of Commercial Banking for Hong Kong and Macau Frank Fang, said that new economy companies are set to play a more pivotal role in stimulating economic growth in the region, given recent imperatives such as the transition to net zero. He highlighted the role that Hong Kong will play as a bridge between global capital and mainland China’s growth story.
Besides financing solutions, HSBC provides support for the innovation economy through dedicated client coverage teams for the private equity and venture capital industry, the announcement said. It also highlighted the bank’s digital solutions such as corporate platform, HSBC Business Go.
