By Tsering Namgyal
Hong Kong’s biggest startup community connector WHub has over the past few years become synonymous with the city’s vibrant startup scene. It has over 2,800 startups on the platform, has organized over 500 events, including the Startup Impact Summit #SIS, ten job fairs that attracted more than 10,000 people, and has published more than 6,500 jobs. Recently it published a groundbreaking survey (download it here) on HK’s startup ecosystem. We speak to the founder of WHub Karen Contet Farzam (also the founding member of FinTech Association of Hong Kong) on what makes Hong Kong tick as a fintech hub.
Q: WHub has recently published a ground-breaking white paper on FinTech? Please tell us some of the key findings and what led to the publication of this White Paper?
A: Over the past three years, Hong Kong has been transitioning from a leading financial hub to a competitive FinTech hub.
WHub’s FinTech Whitepaper presents the key findings and facts as well as a comprehensive analysis of the contributing factors that helped enable this successful transition. These include a growing and diverse ecosystem, recent startups that raised funding, community-builders, FinTech associations and events, corporate–startup collaboration, regulators and government support, etc.
Such contributing factors include the strength of its existing financial sector, a strong talent pool, Hong Kong’s position as a gateway to regional and Mainland China markets and the Asia Pacific, the regulatory framework, its safeguard for intellectual property and data protection, as well as many other variables.
In less than two years, the regulators have made fast-paced changes to enable innovation ranging from Open API frameworks, Fast System payments, Virtual Banking licences and regulatory sandboxes.
The whitepaper also offers readers an in-depth look at the various Fintech sub-sectors and their underlying technologies (blockchain, artificial intelligence/machine learning, Big Data analysis and cloud computing) and concrete applications within the market.
As for every new ecosystem, most people often don’t immediately realise how attractive Hong Kong actually is as a FinTech hub. As the largest online startup community and power-connector, WHub wanted to showcase HK’s strength as well as the opportunities for all the different possible stakeholders: talent, entrepreneurs, corporates, investors, etc. The more people that get involved, the stronger the ecosystem will become.
Q: Your views on the Hong Kong startup scene especially in FinTech?
A: Hong Kong has seen extensive activity in its startup ecosystem with an estimated 3,000+ startups, a very diverse startup ecosystem of which FinTech accounts for only 14%.
Specifically, the city now boasts the evolution of nine home-grown unicorns including 4 FinTech Unicorns with a valuation of $8.5 billion – AirWallex (raised US$202 million), BITmex (trading history of over US$34 billion worth of Bitcoin since its launch), the TNG FinTech Group (raised US$115 million in Series A, the largest series A investment for a FinTech company) and WeLab (raised US$425 million).
It is not commonly known that one of Hong Kong’s unicorns, SenseTime is the most valued AI startup in the world. The city actually has the second highest density of unicorns, just after Israel.
Hong Kong startup scene is booming, and it is only the beginning.
Q: What makes Hong Kong an attractive place to launch your fintech startup, especially as a gateway to the mainland?
A: As one of the world’s leading international financial centres, Hong Kong’s is characterised by low tax, free port and its well-established international financial market built on a long history of trade and commerce. Hong Kong is ranked first as the freest economy in the world.
Hong Kong is uniquely positioned to allow fast and high scalability. Products can be tested quickly due to its hyper-connected population. Its small market forces startups to think globally from day one. There is a strong sense of genuine support and solidarity within the ecosystem, which further helps boosts HK’s attractiveness.
For centuries, Hong Kong has been the gateway to Mainland China, but now it also plays a critical financial role in the Greater Bay Area with the emergence of cross-industries alliances and joint ventures as well as the key expansion city for the Chinese TechFin giants. With the population of the Greater Bay Area being more than the whole of the UK and twice that of Canada, and the fact that GBA accounts for 12 percent of Chinese GDP, represents tremendous opportunities.
Strategically located at the heart of Asia, Hong Kong is reachable by half of the world’s population within five hours’ flight time, opening the possibility for rapid expansion and international growth.
Q: Could you please name what are some of the fastest-growing and promising subsectors within the FinTech? And if possible some startups that are blazing a trail in their fields?
The Hong Kong FinTech fastest-growing sub-sectors are financial inclusion, crypto currency and wealth management.
Hong Kong is quickly becoming the settlement hub for China’s international payments and securities transactions. As governments look to boost financial inclusion (also through virtual banks) and growth, the power of digital payments is becoming quite significant.
- Hong Kong’s unicorn TNG wallet has released an app that enables foreign workers without bank accounts to make remittances globally at convenience stores in their neighborhood.
- BitMEX is a digital currency exchange platform that offers investors access to various global markets using only Bitcoin and not fiat currency. BitMEX is one of the largest Bitcoin trading platforms globally.
- FinEX Asia is a global FinTech platform connecting professional and institutional Asian investors with high quality, low volatility asset classes, including US consumer loans.
- 8 Securities developed a robo-advisory service and a mobile stock trading app to deliver better online and mobile investment services.
- AngelHub.io (sister company of WHub.io), HK’s first SFC startup investment platform, offers professional investors the opportunity to invest in vetted and promising startups scaling in the Asia Pacific region.
Q. How does WHub help the startups scale up and succeed in what is a very competitive market? And what do you think are the key factors of startup success?
A: WHub.io helps startups unleash their full potential.
We have a vibrant community, including our international partners, that reaches over hundreds of thousands of startups and startup enthusiasts around the world.
WHub’s vision is based on 3 main pillars:
– Connect: Connecting startups with the startup ecosystem to forge game-changing partnerships; enable startups to build their team by posting jobs and contacting talent directly.
– Empower: Providing startups with exclusive WHub Perks, from resources to events; access to inspiring and thoughtful connections and events through WHub’s curated event calendar.
– Educate: Issuing Startup Toolboxes to help startups scale beyond their home countries; organising events and supporting global conferences; curating the latest news in the ecosystem.
We believe in the combination of startup agility and corporate power. Startups need infrastructure, access to market and know-how; while corporates need new products and services to stay competitive while maintaining an innovative mindset to keep ahead of the game. These are the key factors of startup success.