Exclusive | Hong Kong to fire up IT fund to lure more co-investors for start-ups
One option available is for government to stop investing in start-ups directly and put money instead into venture capital funds, copying mainland approach
Hong Kong will become more aggressive in luring investors who can help develop start-ups as the city seeks to diversify the economy and boost the innovation and technology (I&T) sector, the Post has learned.
Sources told the Post that city leader John Lee Ka-chiu would announce changes to how the HK$2 billion (US$257.4 million) Innovation and Technology Venture Fund (ITVF) operates in his policy address on Wednesday.
Experts said one option available was for the government to stop investing in start-ups directly and instead put the money into venture capital funds, adopting an approach favoured by some municipal authorities in mainland China.
The ITVF, established in 2017, aims to attract venture capital funds to co-invest in local I&T start-ups. Venture capital funds are responsible for recommending suitable start-ups to the government, which will roughly double the amount the co-partner invests.
Currently, 20 venture capital funds serve as co-investment partners.
According to official data, the ITVF injected capital into 53 investment projects and separately invested about HK$302 million in 37 local I&T start-ups between April 2019 and September this year. The projects and start-ups, covering areas such as supply chain management, e-commerce, financial technology, biotechnology and artificial intelligence, attracted more than HK$2.7 billion in private investment.
