Over the weekend Alibaba announced it will launch an HK$1 billion (about US$128 million) not-for-profit foundation to support Hong Kong startups. The organization, which will be known as the Alibaba Hong Kong Young Entrepreneurs Foundation, will be Alibaba’s first entrepreneur-support initiative exclusively for Hong Kong, according to the company.
UPDATE on November 19: Alibaba today launched the Entrepreneurs Fund for Hong Kong officially. The objective is to “to support the aspirations of entrepreneurs who wish to take advantage of the resources offered by Alibaba’s ecosystem in ecommerce, logistics, mobile platforms, cloud computing, and financial services,” said a statement. Alibaba’s Cindy Chow will serve as the executive director of the fund. The original article from February 2 continues unchanged below.
Alibaba says that the foundation will be managed by professional investment managers. But whereas traditional venture capital funds are designed to generate profits for limited partners, profits from Alibaba’s Hong Kong foundation will be re-invested into startups.
“Through the Foundation, Hong Kong entrepreneurs will have access to financial capital, technical assistance and training so they can realize their dreams and visions. Alibaba hopes that the resources provided by the Foundation will help unleash Hong Kong’s potential for innovation and entrepreneurship,” reads Alibaba’s official statement.
Alibaba adds that the foundation will also select 200 university students from Hong Kong annually to intern at Alibaba Group’s businesses in mainland China. The foundation is expected to launch in “the second half of this year.”
Despite how Hong Kong and Taiwan share linguistic, cultural, and geographic ties to mainland China, these three markets have different internet legacies, which reduces the possibility of cross-border startup success. In addition, Hong Kong’s small size means it’s seldom a hot destination for expansion, especially when China’s internet ecosystem is so big and so isolated.
But recently Alibaba and other large Chinese firms have expressed interest in deepening ties with Hong Kong and Taiwan. On the execution level, Alibaba has been aggressively promoting Taobao in these markets, in hopes of attracting more buyers and sellers to its peer-to-peer ecommerce site. In addition, during a visit to Taiwan, Alibaba chairman Jack Ma broadly outlined a grant scheme for Taiwanese entrepreneurs that resembles the one just announced for Hong Kong. Weeks later, Cheetah Mobile CEO Fu Sheng announced he would open a US$3 million fund for Taiwan-based startups.
Alibaba’s ecosystem includes assets in payments, ecommerce, cloud services, mobile browsing, entertainment, and transportation. As a result, startups with ideas that fit these verticals might have the opportunity to use Alibaba’s properties as virtual test beds. The best case study to date is that of Quixey, a company developing search technology that crawls data locked inside mobile apps. After receiving an investment from Alibaba, Quixey’s product was integrated into Alibaba’s YunOS mobile operating system, along with Shenma, a mobile search engine built by Alibaba and UCWeb.
Alibaba has spent the past two years aggressively investing in Chinese and US-based startups. After the company established a San Francisco office in October 2014, it contributed to large rounds for high-profile companies like Lyft, Tango, and Peel.
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