Without a doubt, the FinTech center of gravity is Asia. Recently, KPMG has tracked FinTech investment across three regions. Whilst North American and European FinTech investments decreased in Q1 of 2016, investments in Asia grew by 20%, amounting to a total of US$2.7 billion. At the heart of this market is SuperCharger, Hong Kong's leading FinTech accelerator that is currently taking applications (deadline is October 20th) and has partnered with Let's Talk Payment for media and startup discovery. The SuperCharger team is currently in Bangalore for its roadshow and will hold a networking event at 6pm (registration here) looking for the best start-ups and minds in FinTech.
There is a different rationale behind the growth in Asia. Firstly, Asia is home to billions of potential customers, most of which are currently underserved by traditional financial services institutions (e.g. upcoming middle-class). Secondly, there is an alignment between national policymakers and regulators in developing their local FinTech ecosystems.
Within Asia, the Hong Kong government is actively coordinating its strategy. Its Monetary Authority & Central Bank (HKMA) has announced the launch of Regulatory Sandbox, while the Securities Future Commission (SFC) has initiated a FinTech contact point. Investment promotion is well under way with InvestHK recently appointing a FinTech Leader. Last but certainly not least, recorded FinTech investments in the city amount to US$165 million.
The dynamism of the market is just starting, as mentioned by Veronika Kuznetsova, Managing Director of SuperCharger: "This year we conducted a global roadshow covering 12 cities and spanning 120,000 km. This gave us the chance to meet and evaluate local FinTech ecosystem. Comparatively, Hong Kong displays more maturity but also is a clear attraction point for European and American FinTech companies looking at internationalizing their businesses."
Hong Kong remains a highly attractive destination, for its status as a global financial center makes it a natural beacon in the region. Policymakers, investors and entrepreneurs understand this and are capitalizing on it. The market opportunity has always been there, and now the tipping point has been reached. Asia will continue to grow and nurture success stories. It is all about timing, and entrepreneurs need to find their best route into such large market opportunity.
On this note, Janos Barberis, Senior Research Fellow at the Asian Institute of International Financial Law and Founder of SuperCharger, agreed: "When I first arrived two years ago, a lot of work on the education side was needed. Explaining what FinTech was a prerequisite before even engaging in a discussion about the add-value it brings to corporate partners. Corporates have passed the FinTech 101 & marketing stage, and now it is all about implementation."
Yet entering the Asian market properly requires a detailed planning. Market information asymmetry is high and market stages (e.g. infrastructure, regulators, etc.) are highly fragmented. This is a juncture in which accelerators plays a critical role and SuperCharger aims to place itself.
The success of SuperCharger’s first program has been marked by an avid response to application – 161 applications, the largest number of applications to a FinTech accelerator in Hong Kong – and two Demo Days that hosted over 300 investors and guests. Notable alumni include Funding Societies who raised $7.5 million from Sequoia Capital for its development of a P2P lending platform, and MicroCred who secured $71 million in capital investment for its expansion in China.
The second program has been bolstered by an even stronger network of investment partners and decision makers. This year, SuperCharger’s Main Partners include Standard Chartered and Fidelity International, a leading bank in Asia and a global asset and fund manager respectively. Moreover, to pool the best FinTech talents for its second program, SuperCharger has held roadshows across Asia and Europe.
The second program will commence on 9 January and conclude in April 2017 with a Demo Day in Hong Kong. Application closes on October 20, 2016 at fintechsupercharger.com. The SuperCharger team is in Bangalore, today only, and hosting a networking event at 6:00 PM at 91springboard. Registration details are found here: https://supercharger.typeform.com/to/jTFlJF.