HSBC has unveiled a US$1 billion Asean Growth Fund to help scale up platform businesses in the region’s booming digital economy. The fund aims to help platform players achieve economies of scale, grow their asset portfolios, and advance through the corporate lifecycle.

Separately, HSBC is introducing venture debt to the Singapore market, earmarking US$150 million to provide financing to high-growth companies in the country that are backed by venture capital or private equity investors.

Southeast Asia’s digital economy is among the world’s fastest-growing. Worth US$218 billion in 2023, it is expected to reach US$600 billion by the end of the decade, at a compound annual growth rate of 16%.

“With a working population that is digitally native, increasing in size, and poised to consume more goods and services – especially on e-commerce – Asean has so much potential for growth,” says Amanda Murphy, head of commercial banking for South and Southeast Asia at HSBC. “We are delighted to launch our first-of-its-kind Asean Growth Fund and work with digital companies as they expand in the region and beyond.”

The fund provides lending to companies that are scaling up through digital platforms across Southeast Asia. It supports new-economy names, more established corporates, and non-bank financial institutions by assessing operating metrics tied to their cashflow-generative asset portfolio, rather than relying solely on traditional financial metrics.

Long-term, flexible financing

The bank’s venture debt offering, meanwhile, provides longer-term and flexible financing solution to high-growth companies in Singapore.

The US$150 million fund supports a range of funding requirements such as capital expenditure, runway extension, or working capital for up to three years in tenor. Through HSBC Venture Debt, new economy clients can gain access to more specialized financing structures, including those involving equity warrant instruments.

Both the Asean Growth Fund and the Venture Debt Fund complement the bank’s existing US$200 million New Economy Fund, which was launched in 2021 to support the working capital needs of early-stage start-ups in Singapore, creating comprehensive financing solutions for new economy clients across different stages of growth.

Priya Kini, head of commercial banking at HSBC Singapore, says: “Singapore has a thriving ecosystem of start-ups, investors, and accelerators which HSBC is part of. A common pain point we hear from start-ups is finding the right financing partner that understands their needs and can support them throughout their growth trajectory – from access to knowledge to skills and funding to strategic partnerships and network for their global expansion.”

She adds: “We know that profitability may not always reflect a company’s potential in its early stages. That is why we take a long-term view of potential growth by evaluating companies based on historical portfolio performance, key operating metrics, growth plans and customer acquisition strategies.”