HONG KONG STARTUP SCENE

By Anar Nasibov, MM

• Hong Kong's economy is characterized by free trade, low taxation and minimum government intervention. It is the world's 8th largest trading economy, with the mainland of China as its most significant trading partner. Hong Kong is also a major service economy, with particularly strong links to mainland China and the rest of the Asia-Pacific region.

• Currency: Hong Kong dollar

• GDP: HK$2,144.6 billion (2014)

• GDP per capita: HK$310,113 (2014)

• Real GDP growth: +3.7% (2014)

• Labor force: 3.886 million (2014)

HONG KONG STARTUP SCENE • 2014 has definitely be a bumpy year for Hong Kong. Since 1997 and the end of 155 years of British rule, “Asia’s world city” has

been trying to remain independent from China, which is all but a given.

• To be clear, Hong Kong is still not China, from a culture, mindset, freedom, ease of doing business perspective, it’s two countries. But the border is small, and the projects of the Chinese government to merge it with neighboring Shenzhen and Guangzhou may not be only bluff.

• Since 2009, Hong Kong knows a true tech revival, and, to the contrary of so many emerging markets, without any help of the local government, better known for its laissez-faire policy.

• A few events such as Startup Saturday, the first co-working space (Boot HK) have launched after an embryo of a tech community felt they needed more than a bar to do their meet ups, and since then, other co-working spaces, accelerators, and even government initiatives have been popping up all across the city-state.

• Where it becomes really interesting is that the two traditional strengths of the Hong Kong economy have turned digital.

• On one hand, manufacturing has seen many startups launch, from Makibox and its cheap 3D printer to Protei and its DIY, open-source boats. Shenzhen is not far and you can feel the hardware culture is very strong.

• On the other hand, bored bankers, whose reputation has been stalling since the financial crisis, turn into entrepreneurs. Startups such as 8Securities (social media + trading), WeLend (P2P real estate loans) have all raised around $10m.

• A few success stories also have helped from CMS Strikingly to local buzzfeed-like 9Gag.

• Overall, it’s fair to say the local community is very vivid, organically grown with little to no support from the state (except very recently), so visiting HK is usually made of authentic encounters with entrepreneurs who made it with their guts.

Opportunities In Hong Kong

• Hong Kong's economy is characterized by free trade

• Low taxation and minimum government intervention.

• It is the world's 8th largest trading economy.

• Hong Kong is also a major service economy, with particularly strong links to mainland China and the rest of the Asia-Pacific region.

• The world’s second largest recipient of foreign direct investment (FDI), after Chinese mainland.

• The world’s second largest source of FDI, after the US

Top 5 most promising Hong Kong start-ups

GoGoVan

• Originally envisioned as a business selling advertising on takeaway lunch-boxes, the founders of GoGoVan soon switched to logistics when they discovered how hard it could be to book delivery drivers through Hong Kong’s dispatch centres. GoGoVan’s app connects users with 18,000 registered drivers and has expanded to Singapore. In August 14, the company secured US$6.5 million in a Series A funding round led by Centurion Investment Management.

Insight Robotics

• Hong Kong-based firefighting robot firm Insight Robotics has developed a wildfire detection system combining thermal imaging and artificial intelligence technology to spot fires. Insight Robotics’ systems are already in use in five provinces and seven cities across mainland China. The company was founded in 2009 and announced in November it had secured US$2 million in Series A funding from investors including Bright Success Capital, and Caldera Capital Partners

Vitargent

• Vitargent uses fish embryos to test food, cosmetics or other consumer goods for contaminants and toxins. Founded in 2010 and based out of the Hong Kong Science and Technology Park, the company claims it can screen for more than 1,000 toxins at once compared to the five to 10 toxins for existing technology. In March, Vitargent closed Series A funding from California-base venture capital firm WI Harper for an unknown sum.

BOXFUL

• In a city plagued by tiny living spaces, on-demand box storage start-up Boxful offers a solution by picking up a customer’s belongings from their homes to be stored in warehouses and returned when needed. Founded in October last year, Boxful’s services start at HK$49 a month for a standard box which holds up to 20 pairs of shoes. Boxful raised $1.5 million for the venture from unnamed angel investors and has recently launched a major MTR advertising campaign.

Sensbeat

• Launched in August 2014, Sensbeat is a mobile app which allow users to share their moods through music and photographs. Sensbeat’s founders are graduates of the Hong Kong University of Science and Technology and became the city’s first student-led start-up to secure US$500,000 in seed funding. They went on to receive an additional US$500,000 from HeungKong Group. In January, Sensbeat joined the Plug and Play three-month accelerator in Silicon Valley, which has become a hub for international talent.