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International start-ups still see Hong Kong as a fundraising centre despite social unrest, says boss of AngelHub crowdfunding platform

Enoch Yiuenoch.yiu@scmp.com

Young international start-ups " and the investors who back them " still see Hong Kong as a key fundraising hub despite almost eight months of social unrest that have savaged the economy, according to the city's first equity crowdfunding platform.

AngelHub, which was licensed by the Securities and Futures Commission last April as the first crowdfunding platform for professional investors to back growth stage start-ups, has completed three deals already.

And an international competition for start-ups to win a fundraising windfall has had no shortage of applicants.

Co-founder of AngelHub, Karen Contet Farzam, said she has seen no signs that start-ups have been put off raising funds in Hong Kong. Photo: Jonathan Wong alt=Co-founder of AngelHub, Karen Contet Farzam, said she has seen no signs that start-ups have been put off raising funds in Hong Kong. Photo: Jonathan Wong

"We have received over 500 applications from start-ups around the world to join this fundraising competition programme and nobody has expressed any worry about coming to Hong Kong to attend the grand final event," said AngelHub co-founder and chief executive Karen Contet Farzam.

"This demonstrates that Hong Kong is a fundraising hub for start-ups and offering great investment opportunities."

The platform recently held a mega round of fundraising which helped Pomelo, a Thai fashion e-commerce start-up, to raise US$52 million in fresh funding from a group of investors including some leading venture capital companies such as Jungle Ventures, JD.com and Thai retailer Central Group. Two smaller deals raised a combined US$2.5 million, according to Contet Farzam.

Its next major development is to bring global start-ups to Hong Kong. Angelhub is currently hosting a competition in which start-ups first need to present their projects in their own markets, which include Paris, London, Brussels, Singapore, Shenzhen and Hong Kong during December and January.

The grand prize winner, to be announced on February 14, will receive up to US$1 million in equity from investors while the rest will get a US$10,000 cash prize.

Since April, AngelHub has received over 600 applications from start-ups wanting to raise funds. It will screen their projects to root out the best ones to be matched with the right international investors.

Ali Celiker, founder and chief executive of British Pearl, a UK start-up that operates a real estate investment platform, set up an office in Hong Kong Cyberport in September, three months after the anti-government protests started in June. The company uses AngelHub's platform to raise funds.

IPOs trickle back to Hong Kong as it maintains resilience amid protests

"The unrest in Hong Kong has not discouraged us from establishing our business here," Celiker said. "Hong Kong is without question one of the world's leading financial cities, and as a financial services company we had to seriously consider it as a centre for our Asian expansion plans."

He said the city's use of English as a business language and its legal system based on English common law has made life easier, while the AngelHub platform allows his company to access to high net-worth Hong Kong investors to finance its future expansion in Asia.

"The platform may be new, but they have delivered a remarkable number of high quality, vetted investors who are able to invest in our business," he said.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.