China’s fintech firms find new way to access foreign funds

CHINESE fintech firms are slowly and steadily making a name for themselves.

In the first half of this year, investments in fintech companies in Asia hit US$16.8 billion across 162 deals. Of those, Chinese startups attracted six of the top 10 deals.

Ant Financial’s US$14 billion deal topped the charts, followed by a US$290 million deal by Dianrong, a US$1160 million deal by WeCash, a US$129.9 million deal by Meili Jinong, a US$100 million deal by Tiantian Paiche, and a US$65 million deal by 9F.

After achieving success domestically, many Chinese fintech companies want to test the market overseas, especially in Southeast Asia.

With a large population, relatively similar macroeconomics, large underbanked populations, and a significant number of Chinese people overseas, Southeast Asia is seen as the perfect destination for ambitious fintech firms.

In order to ease their entry, China’s found an ally in Invest Hong Kong, the entity primarily responsible for foreign direct investments into Hong Kong.

“The fintech in the Chinese mainland is business-to-customer or B2C, mainly coming from e-commerce giants such as Tencent and Alibaba. But Hong Kong is totally different and has been a business-to-business or B2B player since the beginning. The two different fintech ecosystems are complementary,” Charles d’Haussy, Head of Fintech at Invest Hong Kong told China Daily.

The idea is for Hong Kong to help promote China’s fintech companies globally and create access to international finance for the startups.

Since Hong Kong’s policies are investment friendly, they are likely to make the transition for ambitious Chinese fintech firms easier.

Local policies on initial public offerings, for example, allow technology firms to issue shares with a range of voting rights in Hong Kong and has successfully attracted Chinese tech giants like Xiaomi to list on Hong Kong’s Stock Exchange.

“Hong Kong has pledged full support to the fintech sector and has rolled out relevant policies to attract professional talent from the mainland”, d’Haussy told China Daily.

Whether it is visas for tech staff, infrastructure, or international connections, Hong Kong might just be the catalyst China needs in order to become the world’s number one investment destination when it comes to fintech.

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