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HSBC ups innovation economy lending
Specialist scheme focuses on start-ups, tech-led firms in Hong Kong, mainland China
The Asset 31 May 2023

In an effort to strengthen its dedicated support to the innovation economy in Hong Kong and mainland China, HSBC will upsize its specialist lending scheme to start-ups and tech-led businesses to US$3 billion.

The bank will also add its first venture debt capability in Asia, bolstering its financing solutions in Hong Kong for early-stage, high-growth companies with venture capital backing.

Since 2019, HSBC has set up two dedicated debt financing schemes totalling US$1.8 billion to support technology and healthcare ventures in the Greater Bay Area, which includes the Chinese province of Guangdong and the territories of Hong Kong and Macau.

Driven by strong customer demand, the two existing financing schemes will be combined to form an upsized US$3 billion fund called the HSBC New Economy Fund. The enlarged fund will now support start-ups and tech-led businesses in the climate tech, industrials and consumer sectors in Hong Kong and mainland China, while retaining its existing focus in technology, healthcare and life sciences.

From Series A stage and beyond, the bank says it will continue to offer working capital, capital expenditure facilities, treasury management and corporate finance solutions to meet the needs of innovation economy companies at different stages of their lifecycle.

Under the fund, the bank is also introducing venture debt to provide early-stage businesses with bespoke debt financing solutions, with the capability to include equity warrant instruments within the lending structures.

Apart from financing solutions, HSBC adds that it is continuing to grow and invest in specialist support for the innovation economy ecosystem through dedicated client coverage teams, including private equity and venture capital funds and their portfolio companies.

“Structural shifts driven by imperatives, such as the transition to net zero, the fourth industrial revolution and Web 3.0 are redefining businesses, regardless of their industry and size,” says Frank Fang, the bank’s general manager and head of commercial banking for Hong Kong and Macau. “New economy companies are set to play a more pivotal role in stimulating economic growth. With ever growing links with mainland China, Hong Kong will continue to be the preferred gateway bridging global capital to China’s growth story.”

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