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Business / Economy

Hub bridges HK, next-door city for startups

By CHAI HUA (China Daily) Updated: 2016-05-12 08:58

When Chan Sing, 31, started his first company in 2012, it was difficult for the startup to find capital in his hometown Hong Kong.

"The fund raising channel in Hong Kong at that time was mainly banks, but it's not easy for an internet-based startup like us to secure sufficient financing," said Chan. "We were lacking in collateral, but needed large investment to expand our client base."

Last September, he started his second startup across the border, in the Qianhai Shenzhen-Hong Kong Youth Innovation and Entrepreneur Hub in Shenzhen. He received a 50-million-yuan investment in less than six months.

Covering about 58,000 square meters, the E Hub opened in December 2014 in the Qianhai special economic zone, part of the Guangdong Free Trade Zone.

The E Hub has eight incubator partners, including the Chinese Academy of Sciences, China Telecom, CT Venture, Huawei Technologies Co Ltd, Lenovo's Legend Star and DJI Innovations, to provide financial, professional and mentor support to startup teams.

The E Hub intends to create an environment that Hong Kong's young entrepreneurs would like. It has invited Hong Kong-based architect Barrie Ho to design its eight office buildings, which will be managed by a Hong Kong company.

It also promises rent-free offices for one year, on-site residence at reasonable rental, a Qianhai-Hong Kong shuttle bus service and free high-speed Wi-Fi.

The E Hub last year attracted 124 startups, about half of which are from Hong Kong. It plans to incubate another 50 HK teams in 2016.

Three Hong Kong teams ranked in the top ten of the most funding raised and another four listed in the top ten of revenue by the end of 2015.

"The opportunity cost in Hong Kong for entrepreneurs is relatively high, with high rents and labor costs, and the Hong Kong market is small," said Amy Fung Dun-mi, deputy executive director of the Hong Kong Federation of Youth Groups.

The federation has been working with the E Hub to help Hong Kong youth to start their own businesses. Fung said Hong Kong applicants are "very active."

She said the E Hub has become the first choice for many Hong Kong youth when planning to establish startups on the mainland as its entrepreneurial environment is improving day by day.

In addition, the biggest attraction for Chan is the E Hub integrates the advantages of Qianhai and Hong Kong. Chan said his startup, Ekstech Limited, is developing a vertical search engine for cross-border e-commerce traders so they could find the most suitable product directly.

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