HSBC Creates Special Debt Fund for ASEAN Startups Worth IDR 15,8 Trillion

HSBC announced debt funds special startup "ASEAN Growth Fund" worth $1 billion (around Rp. 15,8 trillion) to accelerate startup expansion in the rapidly growing Southeast Asia region. This fund is devoted to digital startups/companies, especially in the sector new economy which is eyeing expansion into Southeast Asia.

“HSBC is very enthusiastic about the development of the digital economy in ASEAN, including Indonesia. "We are excited to work with digital companies to support brands in expanding their business expansion in the ASEAN region and beyond," said HSBC Indonesia President Director Francois de Maricourt in a press conference, yesterday (27/3).

Managing Director, Wholesale Banking HSBC Indonesia Riko Tasmaya continued, ticket sizes for each of these loans starting from $25 million-$100 million with a term of one to three years. Banks will use metrics during assessment that consider business operations related to the company's cash flow generative asset portfolio, including receivables, rather than relying solely on traditional financial metrics.

Another interesting thing is that startups who want to expand into the ASEAN region can use the limit they receive and disburse it according to the currency of the country they are targeting. For the record, in this region HSBC operates in six countries, namely Indonesia, Singapore, Malaysia, Thailand, the Philippines and Vietnam.

“Because a business enters the ASEAN region, they have difficulty getting it financing in each country, so it must be starting pitching to each bank in each country. But if you only need access to the Growth Fund from one country, you can expand to five countries in ASEAN. This is ease of business which is very seamless pattern and the nominal amount is also significant," explained Riko.

HSBC does not provide details regarding the portion in each country for its distribution, but it is hoped that the portion from Indonesian startups can occupy the majority position considering that this country has the largest digital economic opportunities.

“We are looking for startups scalable, also moving in new economy. This sector is estimated to be worth $218 billion and the figure is estimated to soar to $600 billion by 2030. That's why this sector needs it funding special."

Before fund This was officially announced, Riko said that so far there are eight applications from startups in this area that are being processed. The transaction value is estimated to be worth $500 million and it is hoped that distribution will be completed no later than Q2 2024.

A number of startups from this region have received financing facilities from HSBC, among them Akulaku, Sea Group, eFishery, Atome, and Funding Societies. According to Riko, the startup used the loan to develop its business in each country where they already operate.

“eFisheries are interesting because they exist social impacts, then they also developed in Singapore and India. So we connect them with network we are there to support his business outside Indonesia. The nominal reached $30 million, now so do we support them for ESG roadmap. "

Announce Venture Debt

Separately, at the same time, HSBC announced other managed funds, namely Venture Debt specifically in the Singapore market by allocating $150 million (Rp. 2,3 trillion) to provide financing to large-scale, high-growth companies in Singapore that have been supported by venture capital or private equity investors.

Venture Debt provides long-term and flexible financing solutions for companies, supporting various funding needs, such as capital expenditure, extensions runway, or working capital with a tenor of up to three years. Companies from the sector new economy can also gain access to more specialized financing structures, including those involving equity collateral instruments.

Head of Commercial Banking for South and Southeast Asia HSBC Amanda Murphy said, "HSBC has a proud history and strong heritage in ASEAN in supporting entrepreneurship and increasing business scale. The introduction of our latest offering allows us to further support companies new economy in ASEAN, both start-ups and emerging ones, as they expand in the region and progress throughout the company life cycle.”

Dua fund above completes fund HSBC previously announced a $200 million New Economy Fund launched in 2021 to support the working capital needs of early-stage startups in Singapore, creating a comprehensive financing solution for new economy clients at various stages of growth.