Hong Kong’s FinTech funding landscape is dominated by a small number of large deals

In the first half of 2017, 87% of the total investment in Hong Kong FinTech companies went to one large deal

Total FinTech investments in Hong Kong have increased year-on-year since 2014 after rocketing by $141.4m in 2015. This steep growth is due to three large deals closed since 2014. When considering only deals valued under $50m, FinTech Global found that investments in Hong Kong’s FinTech Sector fell by 53.4% in 2016 to $31.2m, lower than the total investment in this bracket in 2014. Despite this, the investment in deals under $50m seems to have picked up in the first six months of 2017 with 69.9% of the funding to this segment in 2016 already committed to FinTech companies in Hong Kong. The number of deals has remained reasonably consistent since 2014, with a slight increase in 2016. H1 2017 is on track to maintain this deal activity levels.

More than 50% of deals closed between 2014 and H1 2017 went to the three subsectors; Payments & Remittances, Data & Analytics and Institutional Investments and Trading

 

  • The Payments & Remittances Sector received the largest share of deals since 2014. The biggest deal to a Payments & Remittances company in this period went to Point of Sale developer ibox mPOS, which raised $1.3m in November 2015.
  • Just over a quarter of all deals went to the InsurTech, WealthTech, Marketplace Lending and Real Estate subsectors.
  • While Institutional Investments & Trading companies only received 17% of the total deals for the 2014- H1 2017 period, one of the highest raising companies based in Hong Kong falls into this subsector. Futu Securities has raised a total of $215.5m across three deals since 2014.

The Top 10 most active FinTech Investors participated in more than half of all deals to FinTech companies based in Hong Kong between since 2014

  • 53.0% of deals to FinTech companies based in Hong Kong in the period 2014 – H1 2017 were from the top ten investors.
  • Four of the top ten investors; Cyberport Hong Kong, Supercharger, Nova Founders Capital and Bigcolors, are based in Hong Kong. Of the remaining investors, two are based in China and the remaining four are based in the United States.
  • 4% of investments to FinTech companies in Hong Kong were made by the four accelerators and incubators in the top ten: Innovation Lab, Cyberport Hong Kong, SuperCharger and 500 Startups.

The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2017 FinTech Global

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