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Alibaba Makes Its First FinTech Investment In Hong Kong

This article is more than 6 years old.

Betatron Startup Accelerator

Alibaba has expanded its investment portfolio in Hong Kong and has chosen Qupital to be its first FinTech investment in the city.

Accessing cash when you need it the most is critical for the success of any business, especially startups and SMEs. Qupital's aim is to address this problem.

Co-founded in March 2016 by Andy Chan (25) and Winston Wong (26), Qupital is Hong Kong’s first and largest online invoice discounting exchange. To simplify what it does, Qupital allows companies to raise finance against their receivables by connecting them with professional investors, hedge funds and family offices.

Qupital has just secured a seed investment round of $2 million, led by MindWorks Ventures and Alibaba Entrepreneurs Fund, with co-investment from DRL Capital, Aria Group and several other investors. The funding will be used to enhance its technology platform and also to facilitate expansion in the region.

I first met Andy Chan a couple of months after he first launched the company. We invited him to be a guest speaker at one of our Betatron Startup Accelerator events in Hong Kong and was immediately impressed with the Brown University graduate's focus and determination. It's been no surprise for me to see Qupital generating significant traction over the last few months, as the platform truly creates value for both SMEs and investors.

Cindy Chow, Executive Director at Alibaba Entrepreneurs Fund, commented about the investment: “We are thrilled to see Qupital's innovation to help SMEs access more cost-efficient financing channels. We look forward to working with creative startups like Qupital to further develop the FinTech marketing in Hong Kong.”

Working capital

Lack of access to working capital is a big problem for Hong Kong's startups and SMEs. Over 25% of the 300,000 SMEs in Hong Kong recently reported that it’s causing a major barrier to their growth and internationalization.

Qupital is positioning itself to address this major problem and help solve the reported $200 million SME financing gap by allowing them to turn their invoices into cash. The opportunity is huge, with the receivables market size in China alone being over $3 trillion annually.

David Chang is the Managing Partner at MindWorks Ventures, a Hong Kong-based regional venture capital firm. Chang has been instrumental in helping to structure the funding round and told me: “Qupital is a textbook example of how Internet and technology help to optimize a traditional industry. There is a large financing gap in Asia for underserved SMEs, and we look forward to Qupital becoming the dominant player in this market.”

The two co-founders spotted the opportunity to build Qupital when they noticed that many businesses here in Hong Kong had cash tied up in unpaid invoices. Chan added: “This meant that the SMEs were being underserved by traditional lenders with slow and cumbersome processes.”

The partnership with Alibaba opens up enormous potential for Qupital to expand its reach to a brand new audience. But, more importantly, for SMEs in Hong Kong and around the region, it's creating a really exciting opportunity. As it finally enables you to inject cash into your business when you need it the most!