HSBC Commercial Banking is launching the GBA+ technology fund, which will provide US$880 million of debt financing to high-growth, early stage companies, with a central focus on those in the Guangdong-Hong Kong-Macau Greater Bay Area (GBA).

HSBC says the GBA+ technology fund reflects the bank’s strategic commitment to helping entrepreneurs and the new economy thrive across the GBA.

The dedicated lending facility will support enterprises in sectors such as e-commerce, fintech, robotics, biotechnology and healthcare technology in China, Hong Kong and Macau, pioneering a holistic approach to supporting new economy companies.

Strong tech growth

Announcing the launch of the new fund, Terence Chiu, head of commercial banking, Hong Kong at HSBC, noted the closer economic partnership within the GBA is set to drive the growth of many of its Hong Kong customers, especially those in new economy sectors.

“These companies have different business models to those that we served in the past and the funding ecosystems around them have also evolved,” he said. “The GBA+ technology fund reflects HSBC’s commitment to supporting the next generation of growth companies across the GBA and adapting the way we do business to better meet their needs.”

Neo Wang, co-chief executive and head of commercial banking, Guangdong at HSBC, added that the Pearl River Delta is recognised as a global innovation hub. “The region has the largest amount of hi-tech companies among the provinces of China,” he said. “At present, over 45,000 hi-tech companies operate in Guangdong, increasing by 37% compared to the same period last year.

“The launch of the GBA+ technology fund will help us finance innovative companies who are driving the transformation of Guangdong’s economy at a crucial stage in their growth. HSBC stands alongside entrepreneurs and businesses aspiring to be the next unicorn.”

The GBA+ technology fund will principally focus on providing further senior debt financing to companies that have received funding from venture capital or private equity firms. It aims to provide entrepreneurs that have viable business models with liquidity to finance growth rather than to fund proof of concept work in the earliest stages of a start-up’s journey.

Dedicated teams

In 2018, HSBC Commercial Banking set up dedicated teams in Guangdong and Hong Kong to support the business ambitions of GBA-based technology companies. “This investment in technology sector expertise gives HSBC greater insight into innovative business models that helps it understand the unique financial needs of high growth companies,” the bank states.

Customers in innovative sectors such as e-commerce, fintech, robotics, biotechnology and healthcare technology will be eligible for the fund. Apart from funding support, HSBC continues to adapt its offering to meet the full range of banking needs of businesses at each stage of their growth journey, from cross-border cash management and foreign exchange to accessing the private and public capital markets.

HSBC also promises to help build these companies’ networks by connecting them with peers and industry thought leaders through exclusive events.

“HSBC is committed to supporting local entrepreneurs and innovative companies: over 80% of new business accounts opened in Hong Kong are for start-ups that have been incorporated for less than three years,” the bank added.

In April, the bank launched the HSBC sprint account, a new business banking proposition dedicated for start-ups and small businesses operating in Hong Kong. The number of technology customers served by HSBC’s commercial banking business in Guangdong’s Pearl River Delta has more than doubled since 2016.