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Hong Kong Startup News Round Up - 3 June 2018

5 in 5 Minutes

World’s most valuable AI start-up SenseTime raises US$620 million to lead China tech ambitions

Hong Kong-founded SenseTime Group has raised US$620 million in a second funding round in two months, pushing its valuation to over US$4.5 billion and maintaining its position as the world’s most valuable artificial intelligence technology start-up. With the deal, the three-year-old company has seen its valuation surge about 50% within two months from US$3 billion. SenseTime became profitable in 2017 and said its business contract revenue increased by more than 10-fold in the first five months of the year.

Founded by Chinese University of Hong Kong professor Tang Xiaoou, the company has built itself into one of China’s leading home-grown AI companies to spearhead the country’s ambitions for global leadership in the technology. SenseTime has deployed its AI technology and applications in smart cities, smartphones, internet entertainment, automobiles, finance, retail, and other industries.

Ant Financial closes $10b funding round at $150b valuation

Ant Financial, controlled by Alibaba Group Holding Ltd founder Jack Ma, labeled world’s most valuable fintech by the Economist, and operator of China’s biggest online payment platform by market share – Alipay, has closed its latest funding round, having raised $10 billion from global and local investors. A $150 billion valuation would make Ant‘s IPO one of the biggest ever – comparing to the $104 billion of Facebook Inc six years ago and Alibaba’s $168 billion in 2014.

The funding round includes a separate tranche of around 7 billion yuan ($1.1 billion) in new shares which has not been finalized, however the sources spoke to Reuters on condition they not be identified as the deal details are not yet public.

Lack of early-stage VC could hurt HK start-ups, say entrepreneurs

Increasing support from corporate and government investments has nurtured a growing number of start-ups in Hong Kong, but many say the real challenge for entrepreneurs is a dearth of early-stage risk capital from venture capital (VC) investors.

According to a survey conducted by InvestHK, HK VC investors said they have witnessed a better start-up ecosystem in the city, with the number of start-ups growing by 81% from 1,065 in 2014 to 1,926 in 2016.

However, according to Mikaal Abdulla, co-founder and chief executive of HK-based fintech startup 8 Securities, the real problem for Hong Kong start-ups emerged when they started growing to a stage where they needed round A financing, or US$1 million-plus in funding to grow to the next stage.

“Round A and B financing is very high-risk capital, and this is where Hong Kong fails. The problem is that Hong Kong investors are still relatively risk-averse compared with investors in the US and China.”

Microsoft is now worth more than Google

Microsoft has passed Google in market valuation for the first time in three years, CBNC Reports. Microsoft is now valued at $753 billion, while Alphabet (Google’s parent company) is valued at $739 billion. While Amazon and Apple still rank on top for the world's most valuable global brands in 2017, Microsoft now rounds out above the other two.

Google’s demotion is speculated to be only temporary. It first surpassed Microsoft back in 2012, and the two have taken turns trailing after Amazon and Apple ever since. Nonetheless, this is big news for Microsoft who has shifted focus under the leadership of CEO Satya Nadella, who took over four years ago. Microsoft is now less focused on Clippy and more on targeting cross-platform technologies, the cloud, and artificial intelligence. Under Nadella’s leadership, Microsoft’s stock price has more than doubled.

Smart-locker startup Pakpobox ventures into self-pickup market

Pakpobox Hong Kong currently has about 3,500 compartment doors installed in 60 locations in Hong Kong, including shopping malls and residential areas. The startup handles more than 20,000 parcels every month. Hong Kong Post is one of its clients.

E-commerce has been expanding across the globe in recent years, causing an unremitting demand for logistics services. Smart lockers, apart from courier service and self-pickup at stores, are a growing trend as the facilities allow users to pick up goods 24 hours a day, without waiting for deliverymen and opening hours of stores.

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