French tech firms head to Hong Kong for customers, and good food, of course
There were 12,668 French citizens registered at the country’s consulate as of March 31 this year, double the number in 2014
Why do so many French entrepreneurs choose to start their businesses in Hong Kong instead of Paris or Lyon, which are home to a burgeoning start-up sector?
Besides the typical answers of the rule of law, a sound financial system, good transport and restaurants, the city’s attraction is simple – this is where the customers are.
“We moved our company from Paris to Hong Kong two years ago because our clients are here. Our major clients include many mainland banks, such as China Construction Bank. Putting the company base in Hong Kong has made it easy for us to provide our services to customers on the mainland and in Asia,” said Philippe Blot, co-founder of MeReal Biometrics.
MeReal Biometrics is just one French start-up in Hong Kong. The French government in January designated Hong Kong as one of the 11 French technology hubs globally alongside London and New York.
The technology hubs provide programmes to aid French entrepreneurs seeking to settle in cities outside the country by providing them with mentors, networks, fundraising tools and information and resources on business environments.
Matthieu Bodin, co-initiator of the La French Tech Hong Kong Project, said: “The ecosystem of start-ups that I saw emerging in Hong Kong is currently booming with the contribution of many French entrepreneurs who have settled here in the past five years.”
Blot co-founded MeReal Biometrics in France in 2009. The firm deals in fingerprint technology and works with banks and financial firms that wish to use biometrics rather than alphanumeric passwords to identify clients for money transfers or other financial transactions, as well as for staff identities and building access.
“Hong Kong is a very good location as our headquarters as we can travel easily to mainland China and many Asian cities in a few hours and to many European cities in about 10 to 12 hours. Our firm would like to expand further in many Asian countries as we believe Asia will be the fastest-growing region worldwide,” he said.
Blot said his wife and two daughters liked the Hong Kong lifestyle.
“Hong Kong is a very good city to live in as long as you can afford to pay the rent and have education for the children. The transport is very convenient. And there are a lot of good restaurants in Hong Kong. To French people, food is very important and we enjoy the many international cuisines very much,” he said.
The influx of French entrepreneurs and their families to the city has increased the French population here. There were 12,668 French citizens registered at the French consulate at the end of March this year, double the number in 2014. However, since registering is not mandatory, there have been estimates that there are about 25,000 French nationals living in Hong Kong and Macau, making them one of the largest French communities in Asia.
Arnaud Ventura’s team arrived in Hong Kong in 2007 to set up the China arm of his microfinance business, Microcred, while Ventura himself moved to live in the city last year to manage the global business.
“We choose to start Microcred in Hong Kong as the city is the stepping stone to mainland China – our target market,” Ventura said. “It has proven to be the right choice as we have been up and running for more than 10 years and become a mature business now.”
Ventura said the logistics and support services in Hong Kong had been good. The city is within easy travelling to other cities in Asia, Europe and Africa for its business expansion.
His company offers loans that have helped finance more than 460,000 small and medium-sized enterprises in mainland China and Africa with offices in 10 countries including Zimbabwe, Mali, Ivory Coast, Tunisia and Madagascar.
In mainland China alone, it has issued 105,000 loans to different companies amounting to 5.3 billion yuan.
“In mainland China, there are many banks focusing on the bigger companies while start-ups and SMEs find it hard to get any funding. We are here to fill the gap,” Ventura said.
His company assesses the risks by using technology to analyse data, which has kept the default rate on his lending to about 1 per cent.
Ventura is not worried about the uncertainties in the market such as Britain’s recent vote in a referendum to leave the European Union.
‘We have been here for more than 10 years and we are planning to be in Hong Kong for a long time. We will continue to use the city as a hub to expand our business in mainland China, Asia, Europe and Africa,” he said.
The Hong Kong government is very keen on promoting the technology and innovation industry.
“Hong Kong is in a good position to attract technology companies from France. The Hong Kong government’s policies will help attract more firms to come,” Ventura said.
This article has been amended to correct the time reference to Arnaud Ventura’s arrival in Hong Kong and the number of SMEs in mainland China and Africa that have obtained loans from his firm