Hong Kong Startup News Roundup - 29 March 2020

ZA Bank: Hong Kong’s First Virtual Bank Mass Launches

Hong Kong initiated a process in 2019 to facilitate digital-only banks. The move was indicative of the realization that digital banking, or virtual banks, is the future of banking and not the brick and mortar types. ZA Bank, an offshoot of ZhongAn Technologies International Group, claims the title as the first digital bank to launch in Hong Kong.

As Crowdfund Insider reported in January, ZA Bank started a pilot program in December 2019 where the bank offered a whopping 6% rate for three-month HK dollar deposits, which will be capped at HK$200,000 (appr. $25,000). It was probably a good way to generate deposits. Today, Za Bank is offering a more understandable 1% interest on deposits – but that is still far better than most of its competitors and no minimum balance.

According to a blog post, today (March 24) marks the very first day that ZA Bank is fully operational as a virtual bank. This follows a full year of “non-stop work” to get everything ready after receiving regulatory approval in March 2019.

Betatron announces a partnership with YPSN and Heron Advisory for Maritime Investments

Betatron has announced a partnership with YPSN and Heron Advisory to build one of the leading early-stage Venture Capital investment funds and accelerators in the maritime industry.

Startup companies focusing on the shipping and maritime industry will have access to YPSN’s strong network of 1,300+ members including leading maritime corporations, international organisations and industry CEOs. They will also benefit from the consulting expertise of Heron Advisory who work closely with corporates and governments across Asia and Europe to drive transformation in the maritime industry.

Betatron will be investing up to US$500K into each startup and run a 4-months acceleration program which focuses on business growth and fundraising and concludes with a global investor roadshow in Silicon Valley, Singapore and Hong Kong. Applications are open and will close on April 15th. 

Hong Kong Science Park Virtual Career Expo Attracting 15,000 Visitations from Worldwide I&T Talent for 1,100+ Jobs Available

During the first day, the city’s first and largest virtual career fair for innovation and technology (I&T) reported an overwhelming response from 15,000 visitations from talent worldwide and 60,000 page views. 2,000 CVs were submitted through the fair for the job opportunities being offered from four major technology fields: biomedical technology, artificial intelligence and robotics, smart city and fintech.

Albert Wong, Chief Executive Officer of HKSTP, said: "In midst of current challenges, I&T never stops but is powering ahead. Our Virtual Career Expo, in a few hours since on live, has reported 15,000 visitations from worldwide I&T talent in 45 economies, demonstrating strong interest among talent in I&T.

The majority of the jobs at the fair are in technology and R&D, such as information and communication technology, engineering and biomedical science. About one third of those roles are looking for fresh college graduates. 75 per cent of the positions are open for bachelor degree holders and 20 per cent are for post graduates or those with doctoral degrees and above.

Companies that are hiring include Hong Kong Science Park companies, current incubatees and graduates from HKSTP’s incubation programmes, SMEs and multinationals. The companies use virtual exhibition booths to share career-related information, and hold on-demand live chats, webcasts and presentations to converse with potential hires. Job applicants can submit their resumes and documents in a seamless virtual environment.

During the Expo, HKSTP is hosting free and interactive webinars daily, featuring I&T multinationals, trailblazing startups, industry experts and experienced recruiters to help candidates gain greater insights on the opportunities and career potential in the I&T industry.

Fintech Association urges govt support for local startups

Financial technology startups are calling on the Hong Kong SAR government to immediately launch measures to help the industry cope with the impact of the coronavirus outbreak, which is wreaking havoc on its cashflow and research efforts.

“These challenges particularly impact the startup and small and medium enterprise (SME) members of our fintech ecosystem that are the most vulnerable in times like these,” said Amand Tung, founding board member of FinTech Association of Hong Kong (FTAHK), a not-for-profit association representing over 350 industry players in the local and global fintech community.

“We have not heard of any staff layoffs or closures among our member companies yet, but it is possible to happen in the long run,” said Tung.

“Fintech industry players are expected to be forced to postpone, or even shelve, fundraising plans due to the coronavirus outbreak, as the first wave of impact over the industry, with smaller startups bearing the brunt [of the fallout].”

In a letter to the Secretary for Financial Services and the Treasury James Henry Lau Jr., the FTAHK  asked the government to step up the funding approval process and relax the funding criteria for two programs under the Innovation and Technology Fund (ITF) and one under the Hong Kong Productivity Council, which support private sector R&D efforts.

Biopharma fundraising activities remain hot in HK

Sino Biopharmaceutical issued its first €750 million (US$854.5 million) zero coupon convertible bonds due 2025 on the Hong Kong Stock Exchange (HKEx) in February with legal experts talking up the prospects for the sector.

“Clinical trials usually take a particularly long time to finish and the costs can be significantly high,” Zhen Yueneng, a partner at Tian Yuan Law Firm who advised on the deal, told China Business Law Journal. “The issuance reaffirms Hong Kong’s status as a major fundraising centre for biopharma companies globally.”

Since HKEx introduced the Chapter 18A regime, which allows the listing of pre-revenue biotech companies, in 2018, eight companies have accomplished their IPOs in Hong Kong and raised HK$23.5 billion (US$3.02 billion) by September 2019, according to a HKEx report.

Ivy Wong, the Asia-Pacific chair of Baker McKenzie’s capital markets practice, told China Business Law Journal: “We have also seen an increase in startups and innovative tech initiatives in the region in this sector in recent years, and this is likely to continue to grow, given the increase in global awareness of human health and wellbeing.”

Biopharma is one of 10 key sectors highlighted for development under the “Made in China 2025” industrial initiative. A report from Baker McKenzie titled, the Future of Capital Raising in Biotech and Pharma, says large levels of investment mean that China will be able to grow at a more rapid and innovative pace than many other jurisdictions.