Hong Kong Cyberport narrows target of HK$200m Macro Fund unveiled by CY Leung to start-ups past seed stage

PUBLISHED : Thursday, 18 February, 2016, 6:51pm
UPDATED : Thursday, 18 February, 2016, 8:44pm

The recently announced Cyberport Macro Fund will be used to help local start-ups fill the funding gap as they advance from the seed stage, according to Cyberport CEO Herman Lam Heung-yeung.

Cyberport houses start-up incubation schemes and co-working spaces catering to the city’s 1,600 start-ups. It has helped over 320 young companies since its launch in 2007.

“We think it is the right time to launch this Macro Fund, which will fill the gap for these companies to move to the next stage, where they will need [more] funding to help them accelerate,” he said.

The financial support handed out will “focus on somewhere a little bit before, or at the series A stage of funding.”

Details on the HK$200 million fund have been threadbare since it was announced last month as part of Hong Kong Chief Executive Leung Chun-ying’s 2016 policy address.

He used this platform to also unveil two more funds worth HK$2 billion apiece: one to boost investment in innovation and technology, another earmarked through the Innovation and Technology Bureau for universities to carry out applied research projects.

Lam said that as start-ups in the city grow in quality, the Macro Fund will serve as a bridge leading them to the next stage of development.

While many critics decry the shortage of funding start-ups in Hong Kong receive, there is some dispute as to whether this applies more forcefully at the seed or series A stage. For the latter, investments of between US$2 million and US$10 million are typically sought.

The new fund will target companies that have completed the early incubation or acceleration stages, Lam said, adding that further details will be released in the coming months.

For the fiscal year ending in 2015, Cyberport-backed start-ups raised HK$198 million (US$25.46 million) - up 321 per cent on-year.

One of these, GoGoVan, allows users to book vans on demand and has raised HK$137.5 million. Another, Shopline, which helps retailers build online stores, has attracted HK$9.3 million.

Another fund run by Cyberport called the Creative Micro Fund has come to the aid of 230 companies. It reported a record 556 applications over the past year.

Meanwhile, Paul Chow Man-yiu, chairman of Cyberport, said he would be stepping down in June at the end of his six year tenure.

As announced by chief executive Leung in January, Cyberport will double to 100 the number of companies accepted to its incubation scheme. It will also increase the size of its co-working space by 50 per cent to 120,000 square feet.

The Smart-Space co-working area allows companies to rent a desk or office on a month-to-month basis. It was designed to give start-ups the flexibility to grow, or sometimes fail, without the burden of a fixed contract.