Hong Kong’s tech startup scene is catching up with mainland China
The ascension of tech startups from mainland China onto the global stage has been well-documented, but what about Hong Kong?
According to Duncan Chiu, chairman of the local Cyberport Investors Network Steering Group, the international finance hub took longer to catch on. Young talent in Hong Kong was “more reserved” than their mainland counterparts, he speculates. Instead of entrepreneurship, they tended to go into banking or other professional paths.
But “seven or eight years ago,” that began to change. Local government played a role, with current and former chief executives making efforts to “reposition” the city as an innovation hub. And in 2005, Hong Kong’s government launched the Cyberport initiative in order to incubate local tech startups. Two years ago, the organization also set up a fund targeted at pre-Series A companies.
At the same time, Hong Kong-based entrepreneurs received an “influx of capital” from the US, Japan, and the mainland, providing much-needed seed funding. Now, Chiu says, “We’re definitely seeing Cyberport becoming a fintech cluster,” and the incubator’s tech companies received a record-setting HKD$ 3.89 billion in the first half of this fiscal year.
Successful local companies like AI startup Sensetime and drone-maker DJI have also moved on to the Greater China region, while some mainland institutions are using Hong Kong as a “springboard to go overseas.”
When it comes to setbacks like China’s slowing economy and ongoing trade tensions with the US, Chiu is philosophical. The effects on local tech investment are “not going to be short term,” he predicts. Instead, startups and investors will face “a changing paradigm,” especially in the area of early-stage funding.
In response, “we just have to adjust,” although he also hopes Hong Kong’s government can provide more incentives for private sector investors to help support the tech ecosystem.
Tang Chibo, a managing partner at China-focused Gobi Ventures, has a sunnier outlook.
“I’m very optimistic about the future for Hong Kong,” he tells TechNode.
Tang foresees “amazing growth” in the city over the next five to 10 years, and moved to Hong Kong last year after a decade spent in Shanghai. He considers the Special Administrative Region “one of the key cities for innovation in China” not only in financial technologies but also logistics and AI.
Tang, who received an American education himself, says that local talent is “very global” in terms of experience as well as origin.
As more Hong Kong entrepreneurs seek to enter the world stage, a partnership with the mainland is likely to become increasingly common. China is enthusiastically pushing forward plans to integrate the Greater Bay Area region–comprising Hong Kong, Macau, and nine cities in Guangdong Province–into a massive economic powerhouse, most recently by opening up the world’s longest sea crossing.
On the long-term future of the region, at least, Chiu is confident: “[The] Greater Bay Area will be the Silicon Valley of China.”
Correction: This article has been updated to reflect that the Cyberport initiative began in 2005, not 2007. In, addition HKD$ 3.89 billion of investment was received by Cyberport companies at large, not only alumni startups.