Advancing Trade Finance and Hong Kong’s Fintech Ecosystem: Q&A with FundPark CEO Anson Suen
This week we are very excited to catch up with Anson Suen, the CEO of FundPark, a leading Hong Kong trade finance platform that is empowering SMEs in Asia. They were one of three finalists for Jumpstarter 2017 FinTech Pitch organised by Alibaba Entrepreneurs Fund. Looking forward to welcoming the FundPark team to the SuperCharger program!
Q: Walk me through the journey of FundPark. What inspired you to start FundPark?
While working at an international bank, I noticed that SMEs’ loan application was complicated due to the bank’s internal processes. More importantly, this didn’t seem to only be an idiosyncratic phenomenon in one/two banks. It came to my attention that even in Hong Kong, one of the world’s largest financial hubs, there are countless businesses that are not well supported by traditional financial institutions. This inspired my co-founders and I to build a solution that simultaneously promotes financial inclusion for quality SMEs, and provides an alternative investment opportunity in trade finance for funders. Q: How has FundPark grown in the last few years? We started operating in 2016 when we matched the trade finance deal flows offline and built our risk models, procedures, legal framework, trustee account setup, etc. FundPark’s online portal went live in early 2017 and we saw a month-on-month organic growth of SMEs and funders onboarded onto the platform. By 2017, FundPark had helped more than 150 SMEs (e.g. manufacturers, trading companies, servicing companies etc) in 10+ industries.Since the second half of 2017, we have also onboarded more corporate funders including listed companies, asset managers, fund houses, and so on. This year, FundPark aims to onboard more than 1,000 SMEs. Q: What do you think of the state of trade finance in Hong Kong and Asia? Asia-Pacific accounts for over 40% of the total trade finance, trade credit insurance and trade among all the continents. We have seen a steady increase in activities in this sector, and expect this upward trend to continue. The total funding gap for SMEs in Asia has been significantly enlarged after the 2008 GFC due to the BASEL III implementation, pushing upoperation costs for the banks. Furthermore, export business has shifted from supplier’s market to buyer’s market. Given the stronger bargaining power, more buyers now request long payment terms instead of using Letter of Credit as payment term. This causes a larger liquidity issue for small businesses and results in a higher demand for invoice financing and purchase order financing. In Hong Kong, there are more than 340,000 registered companies and more than half of them are B2Bs. SMEs with long payback periods from their customers are having difficulties in growing their business with lack of financing support from the traditional banks. That’s exactly what FundPark is addressing. Trade finance is also increasingly viewed as an attractive asset class. Non-bank investors used to know very little about trade finance, but money managers are now hungry for asset classes with good incremental yield, low volatility, low duration and diversification, which are exactly the trade finance offers. As a platform connecting SMEs and funders, we have been focusing our attention on building larger quality deal flows, managing risks and provide a very transparent information flow for funders. Q: Where do you see FundPark in 1–2 years? What is your long-term vision?
As a platform to serve SMEs, we are ambitious about the number of clients and deal flows. With our current pipeline, technology enhancement and marketing, we are confident that we are able to onboard more than 3,000 SMEs in Hong Kong in 2 year time. These unbanked / underbanked customers will grow their top-line and bottom-line along the way and we are more than happy to facilitate their growth to include them in the banking ecosystem. This is where SuperCharger kicks in — we believe joining the SuperCharger program will give us opportunities to broaden collaboration opportunities with financial institutions in Hong Kong. FundPark is also eying other countries in Asia, and we plan to expand to those export countries. By building an exchange for invoices and purchase orders, we envision to partner with different money managers and build channels to promote financial inclusions for quality SMEs. Q: What advice do you have for FinTech entrepreneurs in Hong Kong? Hong Kong is one of the world’s key financial hubs, yet in terms of market adoption to new business models and technology, Hong Kong lags behind other countries. This, on the flip side, creates a huge room for launching suitable solutions that could address the needs that traditionally have not been paid attention to. Also, Hong Kong is such a populated city that FinTech startups can locate resources relatively easily, test MVP and product-market fit over a relatively shorter period of time. While regulation might be one of the key challenges that local FinTech startups face, down the road, it is the core value proposition that makes companies and solutions stand out. So from day one, our co-founding team has been continuously challenging ourselves — to make sure FundPark is addressing a pertinent issue. This requires an ongoing collection of customers’ feedback, observation of shifts in customers’ behaviour, and local expertise in anticipating value-added features for the local customers. As FundPark is rooted in Hong Kong, the constant pulse we have on the local SME ecosystem gives us a deep appreciation who they are, where they are and what they need.
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FundPark is one of the 10 companies admitted to the SuperCharger FinTech Accelerator HK 2018 Program. You can find out more about FundPark here.
Don’t miss the Program Launch Event on 20 March, 2018 at NakedHub Bonham Strand.