HSBC launches US$1 billion Asean growth fund

HSBC announced on Wednesday (Mar 27) the launch of a US$1 billion Asean growth fund for businesses looking to expand regionally, and a separate US$150 million lending fund for companies in Singapore.

The sizeable Asean growth fund caters to high-growth industries, more established corporates and non-bank financial institutions that intend to scale up through digital platforms across multiple markets in the region.

The lending fund, which assesses operating metrics tied to the companies’ cashflow generative asset portfolio, was launched in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Priya Kini, managing director and head of commercial banking, Singapore, HSBC said: “A lot of these businesses are looking to grow into Asean, and there is a gap in the market for any institution that can meet all the six most important markets in Asean.”

The bank’s proposition allows for companies to turn to one institution that can serve all the major Asean markets and support them, said Kini, who was speaking at a press briefing.

Describing the funding winter as an impediment to the region’s growth, HSBC’s head of commercial banking, South and South-east Asia Amanda Murphy said: “Some of our customers told us that they needed help with their funding, and it was clear that some corporates found it difficult to raise that extra funding to take advantage of the opportunities.”

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Separately, the London-headquartered bank launched a US$150 million venture debt offering in Singapore.

High-growth companies in the Republic that are backed by venture capital or private equity investors can tap the fund, which offers financing for the companies’ various needs, such as capital expenditure, runway extension or working capital for up to three years in tenor.

Not only do companies now have access to a longer-term, flexible financing solution, they also get exposure to more specialised financing structures, including those involving equity warrant instruments, said the bank.

This is not HSBC’s first foray into the venture debt scene in Singapore.

The two new funds launched on Wednesday complement the bank’s existing US$200 million lending fund established in Singapore in November 2021.

The new economy fund – which supports the working capital needs of early-stage tech startups seeking to expand regionally and beyond – has supported 20 startups as of December 2023.

“(It) was more targeted at short-term requirements, but a number of startups told us that they also need venture debt as they grow up and a non-diluted type of financing,” explained Kini.

The bank also aims to assist Indonesia’s digital players in achieving economies of scale, as the country’s economy is expected to reach a value of US$360 billion by 2030.

“We are excited about Indonesia’s booming digital economy, as it remains the epicentre of the digital economy,” said HSBC Indonesia president director Francois de Maricourt in a press conference in Jakarta.

In Malaysia, HSBC launched a RM500 million (S$142.5 million) new economy fund in September 2023 to support tech-led businesses and Series B and beyond startups that are tapping into the nation’s growing digital economy.

“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,” said Murphy. With additional reporting by Elisa Valenta