With an advantageous geographical location, robust financial sector, and an innovative, conducive regulatory environment, Hong Kong has become a vibrant epicenter of fintech activity. Despite its size, the city has managed to create a dynamic ecosystem that encourages startups to scale rapidly, and is home today to over 800 fintech companies.
Hong Kong ranks first in Asia Pacific and ninth globally in the Global Fintech Index 2021. About 74% of its population use at least two fintech services, with over 90% adopting digital payment, according to PolyU Asklora Fintech Adoption Index in April 2023. The adoption rates for virtual wealth, virtual banking, and virtual insurance are also high, standing at 57%, 55%, and 41% respectively.
To get a sense of Hong Kong’s fintech industry we are taking a look at Hong Kong’s most well-funded fintech companies, looking at equity funding exclusively and highlighting what these companies have been up as well as what’s to be expected moving forward.
Airwallex – US$902 million
Founded in 2015 in Melbourne, Australia, and now headquartered in Hong Kong, Airwallex is a leading fintech platform that helps businesses manage their international transactions.
At the core of Airwallex’s offerings are services including foreign exchange, international payments, and business accounts. By providing a robust, technology-driven solution, businesses can create international bank accounts, gain access to interbank exchange rates, and send money through both local and international clearing networks. This comprehensive suite of services is designed to streamline cross-border transactions, making them more efficient and less costly for businesses.
Airwallex has amassed a diverse client base, from online sellers, marketplaces, and tech companies to traditional businesses with overseas operations across Asia-Pacific, Europe and North America.
To date, Airwallex has raised $902 million in funding. The company is now focusing on improving its suite of services and expanding its geographical footprint. It plans to enhance support for customers across Canada, Brazil, Mexico, and the Middle East, increase its global treasury management services to 22 new countries and 16 additional currencies, and enable cross-border employee card issuing across over 50 countries.
WeLab – US$900 million
Founded in 2012 as WeLend and rebranded as WeLab in 2013, WeLab is a fintech company headquartered in Hong Kong that provides a diverse array of online financial services to both consumers and businesses. Notably, WeLab is recognized as the parent company of WeLab Bank, one of the first virtual banks to receive an operating license in Hong Kong.
WeLab operates several online platforms, each offering distinct services including consumer loans, business loans, and technology solutions for other financial institutions. The company leverages advanced data analytics and artificial intelligence technologies to innovate and enhance its financial products and services.
Outside of Hong Kong, WeLab also operates in mainland China and Indonesia, acquiring last year Bank Jasa Jakarta (BJJ) in a joint venture with Hong Kong-based business group Jardine Matheson’s Astra International.
As of mid-July 2022, WeLab had over 50 million customers and about 150,000 digital banking clients. The company has raised about US$900 million in funding and is one of Hong Kong’s six unicorn startups, according to CB Insights, Dealroom and Forbes.
ZA International – US$230 million
ZhongAn Technologies International Group, doing business as ZA International, is the operator of Hong Kong-based virtual bank ZA Bank. Officially launched in March 2020, ZA Bank was the first fully-operating virtual bank to go live in the city, offering 24/7 banking services covering deposit, loan, transfer, payment and insurance and serving both individuals and businesses.
In January 2022, ZA Bank expanded its footprint into the investment business, becoming what it claims to be the first only digital-only bank to receive a license by the Securities and Futures Commission (SFC) to deal with securities. The license allows it to offer users investment services and wealth products.
This year, the bank is pushing into cryptocurrencies, announcing plans in April to start offering crypto-fiat conversion services.
With more than 600,000 customers, ZA Bank claims it is the largest virtual bank in Hong Kong.
The company was established in 2017 by publicly listed Chinese insurtech firm ZhongAn Online P&C Insurance to explore international business development, collaboration and investment opportunities in the area of fintech and insurtech in overseas markets.
In 2021, ZA International raised more than US$230 million in a Series A funding round. The round included participation of AIA, Chow Tai Fook, ZhongAn Technology, and other investors, the firm said in a LinkedIn post.
Qupital – US$167 million
Founded in 2016, Qupital is a Hong Kong-based fintech company that operates a supply chain finance platform connecting SMEs seeking to raise capital with professional investors.
Qupital specializes in cross-border e-commerce trade finance, leveraging big data, ML and predictive analytics to automate credit decisioning and monitoring processes. This use of cutting-edge technologies has allowed the company to streamline its services, providing quick and reliable financing options for businesses. Qupital claims it has so far served over 500 clients and offered more than US$500 million in funding.
To date, Qupital has raised US$167 million in funding, according to Dealroom and CB Insights. The company secured its last round of funding in November 2021, raising US$150 million in a combination of Series B equity funding and a receivables-backed securitization facility to scale its cross-border e-commerce lending business into international markets and further strengthen its technological capabilities.
Oriente – US$155 million
Established in 2017 in Hong Kong, Oriente is a fintech startup that strives to unlock financial access for the underserved communities of Southeast Asia. Oriente utilizes advanced technologies such as AI, machine learning (ML) and big data analytics to extend credit opportunities to those lacking formal credit histories, offering capabilities and products such as real-time credit scoring, on-demand lending, point-of-sale (POS) financing, and working capital.
Orientes operates three main ventures: Cashalo, a consumer finance platform in the Philippines that provides access to credit both offline and online; Finmas, a licensed digital lending platform built to serve individuals and micro, small and medium-sized enterprises (MSMEs) in Indonesia; and Finizi, a licensed digital credit marketplace in Vietnam.
Oriente has raised US$155 million in equity, with a significant US$105 million raised in November 2018 and a US$50 million Series B in April 2020. In addition to its headquarters in Hong Kong, the company has additional offices in Singapore, Taipei, Manila, Jakarta and Ho Chi Minh City, as well as a global engineering hub in Shanghai.
Featured image credit: edited from Freepik
