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Hong Kong is only just emerging as a key startup ecosystem in the region, and the potential in fintech is perhaps most impressive of all
Following an inaugural success in 2015, RISE Conference returned to Hong Kong from Tuesday May 31st to Thursday June 2nd this year. Fintech discussions and startups featured prominently throughout the three-day conference, with insights aplenty.
Firstly, Hong Kong is only just emerging as a key startup ecosystem in the region, and the potential in fintech is perhaps most impressive of all – while the neighbouring mainland China is charging ahead in the domain of digital financial services, so far only about 6 per cent of Hong Kong’s startups are fintechs.
Given the concentrated presence of institutions’ regional headquarters in the SAR, startups looking to collaborate with or sell to banks and insurance companies have ideal conditions to operate in. While it may be attractive to consider Hong Kong a ‘gateway to greater China’, what I took away instead was that startups based there embrace a more regional perspective, targeting Southeast Asia at large – which closely resembles the regional horizons of Singapore’s startup scene.
For fintechs, emerging markets in the region present attractive opportunities to serve the majority of unbanked and uninsured populations that have yet to gain access to financial services.
Secondly, the conditions Hong Kong entrepreneurs have to deal with are a bit more ‘real’ than in the case of Singapore – with less support, grants and regulatory promotion of fintech, only founders with grit and perseverance do well. No less, I heard that the government apparently set aside HKD 2 billion (US$260 million) for the purpose of fostering the local startup scene, which demonstrates that Singapore’s ample resource commitments to building a homegrown entrepreneurship scene appear to serve as inspiration to other major Asian cities.
Thirdly, Hong Kong’s connections to Silicon Valley are stronger than one might initially assume. With the relentless efforts of people such as Rebecca Fannin of Silicon Dragon, the metropolis has built the bridges to what is still considered the global hub of transformational innovations. Big names, such as Techstars, are flocking to Hong Kong to build out their Asia presence from there.
Further, I very much got the feeling that the competition between Hong Kong and Singapore as key financial centres in Asia does not necessarily extend to fintech. With Hong Kong’s startup scene establishing the city as another important ecosystem, the overall impact of fintech and the quality of startups securing venture funding is likely to significantly increase.
Many Hong Kong startups already are eager to expand to Singapore, which shows the mutual benefits associated with a strong startup scene in Hong Kong. Vice versa, ventures in Singapore will increasingly see the benefits of setting up in Hong Kong.
One impressive stat I took away from one of the talks is that startups in Hong Kong in the past year secured fifteen times more funding than in the year prior. If anything, this demonstrates impressive traction for a startup scene that was barely visible just a couple years ago. The explosion like opening of co-working spaces around Hong Kong sends that same message – something big is happening at the moment.
Another highlight was the presence of many exciting teams from all around the region presenting their businesses across dozens of startup booths. Everyday, there were different early-stage startups on display – some purely in fintech, others with fintech components as part of their businesses or future development plans to add in a fintech play.
Also, there were a few interesting early-stage founders of fintech ventures among the attendees. Among the rather exciting ones was a voucher trade-in platform from India that had racked up significant revenue in no time and without any external funding, a platform for crowdfunding your real-estate projects and a personal trading venture focused on negotiating better rates for individual investors by pooling their purchasing power.
In the insurance domain, however, no particular venture stood out – which reinforces the argument in my last article on the future of InsurTech in Asia.
Following yet another great year at RISE, we can be as excited for e27’s very own Echelon Summit happening. Whether you are a startup entrepreneur or corporate intrapreneur looking to shape your industry, or simply curious about the next big things in Asian tech, Echelon is for you.
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