Hong Kong-based fintech innovation WeLab nabbed $160 million financing setting a new benchmark for the city’s bustling startup scene.
This funding at a valuation estimated at near $1 billion comes well-timed as a week-long flurry of startup events coordinated by Hong Kong’s promotion agency InvestHK tagged StartMeUpHK kicks off with Silicon Valley’s heroic inventor Elon Musk as the star attraction.
Hong Kong is hustling to be known as a tech startup hub, from fintech to biotech to IoT to data analytics. Certainly, WeLab’s large haul underscores how breakthrough models such as its data-intensive online and mobile lending model can be a lure. A shortage of capital for Hong Kong’s newly emerging small businesses has been a drawback however, despite the city’s numerous high net worth individuals and real estate and trading moguls. So has its place in the shadow of the world’s hardware innovation capital, Shenzhen.
A startup ecosystem has been growing nonetheless over the past few years from what was a seed. Hong Kong today counts 10 accelerators and incubators, 34 co-working spaces and a 46% increase in startups now topping 1,500 startups.
The Hong Kong government has gotten into the act in new ways as well. Some $250 million has been earmarked for an innovation and technology fund designed to match funding from venture capital outlays in local tech startups. Hong Kong’s recently established Innovation and Technology Bureau is coordinating science, R&D and innovation efforts and overseeing expansion at Cyberport and the Hong Kong Science and Technology Park. Additionally, $13 million has been set aside for collaboration with state-affiliated engineering labs in the Mainland.
The verdict is still not in over whether such government-led pushes really can stimulate substantial startup activity. The Silicon Valley cluster that is heralded worldwide was created by Sand Hill Road venture firms, although that model is morphing with an increase in angel investing and crowd financing, plus the lean startup phenomenon of take no equity capital.