Qupital, Hong Kong’s first online invoice discounting exchange, secures $2m seed round of funding

Qupital, has secured a seed investment round of $2m. The round was led by MindWorks Ventures and Alibaba Entrepreneurs Fund, with co-investment from DRL Capital, Aria Group and other investors. The company plans to use the funds to expand its SME financing platform and fuel its rapid regional expansion.

Qupital was founded in March 2016 by Andy Chan, a Brown University alumnus, and Winston Wong, a Hong Kong University of Science and Technology alumnus, in Hong Kong to address a lack of efficient SME financing solutions in the market.

Andy said:

“We began our journey together in Hong Kong when we noticed that there were many businesses here that had cash locked up in unpaid invoices while being underserved by traditional lenders with slow and cumbersome processes.”

More than 25% of Hong Kong’s 300,000 SMEs reported that the lack of access to working capital is a major barrier to their growth and internationalisation. Qupital aims to address Asia’s reported $200bn SME financing gap by allowing clients to turn their accounts receivables into cash. The accounts receivables market in China is more than $3tn annually.

Winston said:

“Qupital’s vision is to help inject liquidity into the market, reducing SMEs cost of financing and enabling professional investors access to an entirely new asset class of accounts receivables. At the same time, we are excited about the opportunity to work with Alibaba to reach a brand-new audience of businesses, both in Hong Kong and regionally.”

Qupital currently serves a wide range of SMEs in the export, manufacturing, and distribution sectors. The company actively approaches hedge funds, family offices and other mature professional investors to fund the invoices.

David Chang, managing partner at MindWorks Ventures, a Hong Kong-based regional venture capital firm, said:

“Qupital is a textbook example of how internet and technology helps to optimise a traditional industry. There is a large financing gap in Asia for underserved SMEs, and we look forward to Qupital becoming the dominant player for this market.”

Cindy Chow, executive director at Alibaba Entrepreneurs Fund, said:

“We are thrilled to see Qupital’s innovation to help SMEs access more cost-efficient financing channels. We look forward to working with creative startups like Qupital to further develop the FinTech market in Hong Kong.”

Steve Ho, principal at DRL Capital, a Hong Kong-based regional private equity fund, said:

“We are very impressed by the vision and determination of the founders of Qupital; we believe there is an enormous market for a trade finance platform in Asia. Qupital serves as a perfect bridge between the SMEs and the yield-seeking investors. We are excited about the future of Qupital — a new way for capital to be deployed.”