Global lender HSBC has on Wednesday announced the launch of a $150 million Venture Debt offering in Singapore, and a $1 billion ASEAN Growth Fund, targeting new economy businesses.

The bank said in a statement that high-growth companies in Singapore that are backed by venture capital or private equity investors can now access HSBC’s Venture Debt offering which provides flexible funding arrangements to accelerate their growth.

The new venture debt capability provides a longer term and flexible financing solution to companies, supporting 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.

In addition, Singapore-based digital platform businesses supporting e-commerce in the region can now tap on the newly launched $1 billion ASEAN Growth Fund to achieve economies of scale across multiple international markets, grow their asset portfolios, and advance along the corporate lifecycle.

Both the new Venture Debt and ASEAN Growth Fund complement the existing $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.

“Singapore has a thriving ecosystem of start-ups, investors, and accelerators which HSBC is part of,”

“A common painpoint 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,” said Priya Kini, Head of Commercial Banking, HSBC Singapore.

“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,” she added.

According to the statement, Southeast Asia’s digital economy is among the world’s fastest-growing – worth $218 billion as of 2023 and expected to reach $600 billion by the end of this decade – with a compound annual growth rate of
16 percent.

Recognized as the most innovative economy in Asia, Singapore offers unparalleled opportunities for new economy businesses.

Its culture of innovation, strong intellectual property protection laws, and its status as an international financial center, alongside strong government support through grants and tax incentives, have positioned Singapore as a regional technology hub.

Singapore is also now home to over 5,000 start-ups, 527 investors, and 247 incubators and accelerators.

In another statement, HSBC said the HSBC ASEAN Growth 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.

“Like so many other internationally minded businesses, we are excited about ASEAN’s booming digital economy,” said Amanda Murphy, Head of Commercial Banking for South and Southeast Asia at HSBC.

“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,

“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,” she added.

Meanwhile, HSBC recently surveyed 600 companies operating in Southeast Asia and found that “digitalizing operations” is the top business priority, selected by 42 percent% of the respondents.

This is followed by “growth in Southeast Asia” (40 percent) and “research and development” (37 percent).

To help capture growth in the booming digital economy, nearly 2 in 3 respondents (65 percent) plan to increase their investment in the digitalization of their businesses, second only to “expanding into new markets within Southeast Asia” (66 percent).

“Rapid digital adoption in ASEAN means businesses increasingly – and understandably – need fuss-free digital banking to support their growth,

“They want convenient and simple-to-use trade and payment solutions that would free up more time for them to focus on strategy and expansion,” Murphy added.

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