Project to offer US$30,000 in seed funding to five Hong Kong start-ups
The Betatron programme fills a gap in Hong Kong, claims its co-founder, by providing funding, mentoring and working space
Betatron, a three-month business accelerator, mentoring and seed-funding programme, is offering to invest up to US$30,000 each into five companies in Hong Kong,
Rafal Czerniawski, chief executive of Hong Kong company IC Studio and the co-founder of Betatron, said most accelerators, sometimes called business incubators, and start-up programmes in the city are nothing short of “corporate branding exercises” which “do not enough for start-ups”.
Czerniawski and his IC Studio co-founder Nelson Cheng, were working on a taxi-sharing app Hopsee in Hong Kong, when it struck them just how much the city lacked funding for start-ups.
“Most accelerators do not offer start-up funding, they just provide [working] space and mentoring,” Czerniawski said.
“I came to the conclusion that what Hong Kong needs is an accelerator programme focused on founders that put start-ups as the priority, as well as giving them funding,” he added.
Czerniawski then approached several VC funds which backed his idea, including Mindworks Ventures, Vectr Ventures and Cocoon Ignite Ventures which are founding partners in Betratron, together with The Aria Group, a private company that manages investments and trusts on behalf of a family.
In Hong Kong, there are at least 18 accelerators which start-ups can apply to, according to the government’s Startmeup.hk portal.
However, only government-backed initiatives, such as the Cyberport Incubation Programme and programmes by the Hong Kong Science and Technology Parks offer any form of grant or funding to successful applicants. Most private incubators only provide free working space or mentorship, according to Czerniawski.
Under the Betatron programme, which started taking applications this week and will officially begin in January next year, five start-ups will be selected and receive funding US$10,000 per month for three months. The successful start-ups will work out of the WeWork co-working space in Tower 535 on Jaffe Road in Causeway Bay, which is also a Betatron partner.
In exchange for the funding, Betatron will receive convertible notes in the start-ups, a type of short-term debt that converts into equity in a future financing round.
“When an accelerator offers funding, there is an incentive to help the start-ups to succeed as there is skin in the game, so to speak” Czerniawski said.
He said the mentors and advisors signed up to take part in the initiative will not come from the corporate world, but be seasoned start-up founders and VCs from those founding partner companies, offering specific expertise in areas such as sales, operations or financing.
At the end of the programme, the five Betatron-backed start-ups will have a pitch day to investors with the aim of raising their funding, Czerniawski said.
“We want to work with start-ups that already have an initial product, and help them to polish the product, find the right customers, and start getting some traction,” he said.
“The idea is that by the end of the three months, they would have become investible start-ups that can then raise funding.”