Welcome to Start Up in Hong Kong

Findings from a local startup community, the Startup Grand Line's fundraising record（偉大航道香港Startup募資記錄完全資料庫） and IT Juzi（IT桔子）, a structured Chinese technology, media and telecom startups database and business information service provider, show that the startup ecosystem has continued to grow in the number and scale of overseas capital investments in Hong Kong. As of August 2015, there were 22 local startups which had successfully received US$206 million (HK$1.6 billion), accounting for 1.3 times of last year’s total amount of capital raised.

Hong Kong welcomed the results of the United Nations Conference on Trade and Development (UNCTAD) World Investment Report (WIR) 2015, in which the city came second in global foreign direct investment (FDI) flows for the first time. According to the UNCTAD report, Hong Kong registered FDI inflows of US$103 billion (HK$803.4 billion) in 2014. It puts Hong Kong second only to Mainland China (US$129 billion) and ahead of the United States (US$92 billion), the United Kingdoms (US$72 billion) and Singapore (US$68 billion).

However, according to The Empowering Young Entrepreneurs (EYE) Program Entrepreneurship Ecosystem of Hong Kong Interim Report, a joint study by The Chinese University of Hong Kong's Center for Entrepreneurship (CfE) and Google released on 2 September 2014, in 2009-2013,Hong Kong has seen an outflow of startup investment with HK$10.5 billion being invested by local investors overseas and only HK$3.7 billion being invested in local startups through seed, venture, and angel rounds. It accounts for less than 0.1 percent of Hong Kong’s total FDI inflows in 2014 as mentioned above.

In an interview with Bloomberg Businessweek/Chinese, Prof. Kevin Au, Director of CfE and Director of Center for Family Business and Associate Professor at the Department of Management of CUHK Business School, comments that "Hong Kong does not face a shortage of capital. However, the 'Central value' is deeply rooted in investors' mind. The 'Central value' is about maximizing profits, getting rich quickly and to certain extent, making decisions based on 'short-termism', and thus they tend to invest in conventional sectors such as real estate and finance." He also thinks that as returns from conventional industries are not everlasting, investors in Hong Kong must change in a way to accommodate other possible investment models for a better future. Investing in innovative startups is an alternative pathway for sustained returns.

Commenting on the Hong Kong’s entrepreneurial ecosystem, The Bloomberg Businessweek/Chinese special report cited data from the research report "Crouching Tigers, Hidden Dragons", a joint effort of Google and CUHK CfE. The report has revealed that banks operating in Hong Kong were rated as "very poor" in its role as startup community feeders to provide financing for local startups, while the Hong Kong government was rated as "good" in its role as supporter and enabler of the entrepreneurship ecosystem of Hong Kong.

Please click on the images (p.49-50) below for more details in the original story written in Chinese.

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