FundPark, a fintech-focused platform for trade finance, is planning a new round of fundraising from investors as the Hong Kong-based start-up eyes a role in plugging a US$1.7 billion financing gap for small and medium enterprises (SMEs) in Asia.

In contrast to lending provided by banks, the company provides SMEs with multiple financing options for working capital, without collateral requirements, CEO and co-founder Anson Suen said. FundPark could finance up to 70 per cent of the purchase order or contract value, he added.

"Through AI technology and data analysis, our own proprietary risk-management tool develops its predictive model," Suen said. "Based on that, clients can get loans without collateral."

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Suen sees this as the big market, as SMEs represent 96 per cent of all businesses in Asia and provide two out of every three private-sector jobs. More than 40 per cent of SMEs have their requests for trade finance rejected, contributing to a US$1.7 trillion trade-finance gap in the region, according to the Asian Development Bank.

The company has started expanding among cross-border e-commerce merchants in Hong Kong and mainland China. It is planning a new round of funding, after raising about US$250 million in April last year from a debt issue.

Suen and his two co-founders - Carlos Tsang and Henry Mok - started their entrepreneurial journey at the University of Hong Kong about 12 years ago.

"We set up an e-commerce business, and the business did well," he said. "We wanted to expand but were rejected by the banks in applying for financing at that time."

A view of Hong Kong Science Park in Pak Shek Kok and Ma Liu Shui area.Photo: Winson Wong alt=A view of Hong Kong Science Park in Pak Shek Kok and Ma Liu Shui area.Photo: Winson Wong>

Since its founding in 2016, FundPark has supported over 7,000 merchants with a combined gross merchandise value in excess of US$4 billion, Suen added.

The company started out in an office in the Hong Kong Science Park, but now occupies more than 8,000 square feet of office space in Kwun Tong, with about 100 employees. It also has an office in Shenzhen.

Hong Kong Science and Technology Parks, the operator of the Science Park, provided support and helped the company make connections with the right people - "a critical first step for starting and growing a business," Suen said.

Still, tech start-ups in Hong Kong often lack opportunities to apply their research in real-world scenarios, Suen said. The government could help by providing a list of departmental pain points, which start-ups could peruse to find opportunities to demonstrate their worth, he added.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2023. South China Morning Post Publishers Ltd. All rights reserved.