Robust market expected to further boost enthusiasm among venture capital experts, innovation start-ups connected via CVCF 2021
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Every cloud has its silver lining: the COVID-19 pandemic has significantly accelerated digital trends across sectors to a record pace, as reflected in venture capital (VC) money flows and the emergence of digitally powered business models across sectors globally.
Global VC investment soared to a new high in the second quarter (Q2) of 2021, as investors continued to prioritise larger and later stage deals. High valuations, a robust IPO market, and a substantial supply of ‘dry powder’ (unspent cash awaiting investment) also helped fuel investment, analysts at KPMG believe.
Across Asia this year, bullish post-pandemic market sentiment has led to the smashing of long-standing dealmaking records. For instance, the number of new unicorns in India stood at 28 so far this year, against 12 in 2020. A total of 18 new unicorns emerged in Southeast Asia and the number is likely to top 20. In China, the deal value reached US$57 billion in the first eight months, surpassing the US$56 billion raised through all of 2020.
Amid this incredible market exuberance, the annual Cyberport Venture Capital Forum 2021 (CVCF) will play host to the exchanges of actionable insights on the latest fundraising strategies and effective deal match-making among global venture experts, entrepreneurial leaders, and innovation start-ups. Held on November 2 and 3, the CVCF will adopt for the first time a brand-new hybrid format, seamlessly offering a unified experience of online and offline engagements to participants, without any geographical restrictions.
India smashes record
VC investments in India shot through the roof in Q2’21, soaring past the previous record set in Q4’19. The substantial investments were driven not only by VC investors, but also by relatively conservative funds that feared of missing out, after witnessing the much broadened applicability of digital business models in the pandemic.
Mohanjit Jolly, founding partner at Iron Pillar, an India-focused venture growth fund, says there is nothing like a pandemic to bring about behavioral change. “After the shock, awe and panic during the early days of the pandemic, companies had to "get back to business" and consumers had to make life work, albeit in a socially distant and remote manner. On the consumer front domains such as remote education, remote health and e-commerce took off for obvious reasons. It was the only way to make some semblance of normal life continue,” notes Jolly, who is one of the speakers at CVCF 2021. “Similarly, on the enterprise front, the overall digital transformation themes around cloud and AI adoption, "work from home" enablement, global connectivity and employee productivity applications, all got accelerated from thinking in terms of years to thinking in terms of months.”
“Companies are growing faster, investing more in both organic and inorganic growth, and emerging leaders in various domains are garnering premium valuation and mega-rounds (>US$100 million) from VCs,” Jolly says.
The promising Greater Bay Area
Fintech and e-commerce companies in Southeast Asia have attracted hefty amounts of capital as global investors bet on a post-pandemic technology boom. In China, many US$100 million plus VC funding rounds have been reported. A growing opportunity has emerged for second and third-tier tech companies focused on areas such as e-commerce. Meanwhile, the country has seen an increasing number of smaller deals focused on less mature sectors of Fintech — like B2B services, Wealthtech, and Insuretech.
Kelvin Lei, CEO and Co-Founder of AQUMON, believes the GBA offers huge potential for Fintech companies. “Hong Kong alone boasted US$4.5 trillion (HK$34.9 trillion) of assets under management (AUM) in 2020. With the “Wealth Management Connect” Initiative to be launched within 2021, it’ll be the first time that north and south-bound retail investors will be able to invest in off-shore products and there will be a 150 billion yuan one-way quota for retail bonds. This is new with the equity and bond connect schemes in this backdrop. According to BGC Partners, Hong Kong will surpass Switzerland in 2023 as the world’s largest cross-border wealth management centre. The next big thing in Fintech is digital wealth investment and the biggest trend so far is the electronic trading platform because it attracts more investors to the financial market,” says Lei, another featured speaker at CVCF 2021. AQUMON has partnered up with financial services companies to offer Robo-advisory services.
Even though the Mainland market holds challenges to Hong Kong, such as the different regulatory environment, Lei believes the potential is enormous as long as a company has the core technology and the right talent. “AQUMON has a large on-shore team, who are familiar with the on-shore investment, the legal system framework and local culture. Collaboration from both sides is important for Fintech companies.”
“Venturing for Success: Resilience, Growth & Opportunity”
CVCF has had a solid track record of connecting capital, innovation, entrepreneurship and growth. This year’s virtual platform offers an interactive experience featuring the broadcast of forum and workshop content available 24/7 to the global audience. It also features an “Innovator Showcase” for promising start-up exhibitors, and an exclusive Investor Matching platform for deal-sourcing and fundraising.
Highlights include: the exclusive “MatchEasy” online scheduler for 1-on-1 virtual or physical meetings; “Founder Stage” for participants to explore innovative tech solutions from promising tech start-ups in Hong Kong and beyond and see project pitching videos; “Start-up Clinic” to provide free interactive consultation to start-ups, covering trendy issues in scaling business from accounting, taxation and legal matters, business strategy and management to IT and marketing communications.
Act now and register for CVCF 2021 (2-3 Nov) to explore the golden opportunities in this energised VC ecosystem.