It’s a Virtual Wrap For Cyberport Venture Capital Forum 2020

Cyberport is a quasi-governmental tech innovation organization from Hong Kong. Here are highlights from the recently-concluded two-day Cyberport Venture Capital Forum 2020.

Hong Kong-based startup incubator and ecosystem builder Cyberport recently wrapped up its annual flagship event, the Cyberport Venture Capital Forum. The event took place on November 3-4 as a virtual conference. While the event discussed trends and forecasts within the global innovation and tech ecosystem, it focused on developments in Asia, and especially in Hong Kong and the Greater Bay Area.

Key themes included global geopolitics, its impact on funding and growth, accelerations in fintech, and cross-border exchanges of ideas, knowledge and capital.

“Amidst the epidemic, the number of exhibiting startups tripled compared to last year, reflecting a strong demand for venture capital investment,” Chief Public Mission Officer of Cyberport Eric Chan said about the forum at a pre-event media briefing.

“As more industry professionals and investors participate, we hope startups can understand the latest market trends and pursue the right direction for future development by learning from successful case studies and availing insights shared by internationally renowned speakers,” Chan added.

Cyberport Venture Capital Forum featured over 50 experts across keynotes, panel discussions and fireside chats. It also hosted platforms such as Investor Matching, Innovator Showcase and Start-up Clinic.

The event drew 1700 participants this year, Cyberport disclosed in a statement. It added that the event platform recorded 97,000 views since its launch on 21 October, and facilitated over 250 one-on-one meetings between investors and startups.

Here are some spotlighted segments from Cyberport Venture Capital Forum 2020.

Edtech as the New Venture Hotspot”

This fireside chat featured Managing Partner at Rethink Education Matthew Greenfield, and Founding Partner at Blue Elephant Capital Bill Ning. Jumpstart CEO Relena Sei moderated the conversation.

Co-created with EdVentures GBA Summit, the panel discussed edtech as a VC funding destination. It dived into the evolving characteristics of the U.S., China and global markets.

Greenfield noted that within edtech, D2C companies have emerged the strongest from the pandemic. These companies have especially benefited from the global push toward digitalization.

In the U.S. market, this has resulted in a widening gap, he added. The push for digital has exaggerated the gap between those can afford digital forms of education and those who cannot.

Greenfield expressed his excitement for a concept he called ‘minimum viable upskilling.’ This concept involves short-term training for professionals at low costs. Trained professionals are then placed with companies looking for the talent and willing to pay for it.

On the eastern side, Ning noted that edtech has been popular in China for the past ten years. Educators and engineers have been flocking to edtech in China. The volume of talent in this industry is akin to that of Internet companies, Ning said.

In the larger scheme of things, education is a “heavily regulated and politically sensitive sector,” Greenfield noted. “You can’t behave like Travis Kalanick in the education sector. You have to respect the regulations and the political sensitivities.”

Ning added that edtech is a “half technology,” a mix of human and tech talent. A major challenge to scaling, he noted, is that the industry is still labor-intensive in terms of hiring teachers. This differentiates edtech companies from pure technology companies and slows their growth.

He also suggested that investors would do well to pay attention to peripheral innovation around edtech, such as augmented or virtual realities. He noted, however, that investors would have to be patient with their capital.

Echoing this, Greenfield noted that family offices and foundations have emerged as strong co-investors in edtech. With the social impact mission in mind, and longer time horizons given the nature of family office investing, they are often more patient with startups than VCs, making them a good fit for partnerships in this space.

The panelists also discussed the role of Hong Kong in the edtech revolution. Ning noted Hong Kong has a lot to offer to the Greater Bay Area and China. The region’s strengths lie in its pool of tech talent, education system, and vocational and professional education, he said.

Bridging the post-COVID Funding Gaps”

Moderated by Ivan Wong, Managing Director at Deloitte, this panel discussed post-pandemic funding.

It featured Co-founder, COO and CFO of Angelhub, Karena Belin, Executive Director, Global Venture Development, Pan-Asia Venture Development Platform, and Adjunct Assistant Professor at CUHK Business School, Tina Choi, Managing Partner at GreaterBayX Tony Verb and Brinc’s Global Portfolio Manager Estefania Almeida.

Almeida kicked off the session by highlighting mega contemporary trends in the world. These connected to three themes: automation in infrastructure, data processing and protection, and the circular economy.

Based on the shift in behavior patterns, companies are either raising bridge funds or growth capital, Belin noted. Gaming, foodtech, edtech and wellbeing are especially benefiting from behavior changes due to COVID-19, she said.

Belin also said that fundraising and networking opportunities are now hard to come by. The vetting process too has become more challenging, especially at the early stages. She noted that this made value proposition for crowdfunding platforms more clear.

“It is about pooling the access, the time, and the know-how on a platform where then we can broaden the pie,” she said.

The U.S.-China trade war is another significant cause of global uncertainty. Choi noted that the trade war has changed global dynamics permanently. She noted that the U.S. defined its relationship with Hong Kong vis a vis China. Players in the region will need to mull over collaborations with China moving forward, she said.

She advised Hong Kong companies to review their core technology and offering in order to help them consider repositioning themselves depending on target geographical markets.

Verb added to this thought, noting that Hong Kong needs to embrace its location as a competitive advantage. International companies accessing Chinese markets through Hong Kong, and Chinese companies looking Hong Kong as a route to international markets, will want to play to the strengths of the Greater Bay Area and Shenzhen.

Verb also noted that opportunities for cross border business and liquidity were available in the market. Startups with strong pitches should move aggressively and identify the right local partners, he said.

The Rise of Digital Assets”

Senior Manager, Blockchain and Regtech Lead, Fintech Cluster at Cyberport, Rico Tang moderated this panel.

The panel featured speakers Alistair Duff, Head of APAC at SIX Digital Exchange, Ken Lo, Co-Founder & Chief Strategy Officer at HKbitEx, and Simon Auyeung, Vice President at HashKey Digital Asset Group.

Lo noted that cryptocurrency is a popular fintech subset but also a small asset class in terms of global assets under management. He expressed confidence in the future of virtual assets, including crypto and Security Token Offerings (STOs).

Lo noted that blockchain startups have the traction to get investments. Yet, because blockchain is still considered an emerging technology, few late-stage companies exist on the scene.

He added that the global pandemic made this more challenging because of setbacks in the vetting process.

Lo highlighted STOs as an alternative investment channel for companies. STOs could prompt fundraising for companies at different stages, he said.

Adding his thoughts, Auyeung noted that blockchain investments have been rising since the 2010s. VCs such as Patara Capital and Coinbase Ventures remain active despite the pandemic, he noted.

Auyeung hinted that strong projects should attempt to weather the storm, since risk appetites are likely to stabilize in the long term.

Lo also commented on the evolving guidelines from the Hong Kong administration on digital assets. He noted that these can help Hong Kong play to its strengths as a fintech hub.

Duff added that crypto market figures tend to be inflated, and that the integrity of some exchanges are not institutional-grade. Another challenge for crypto is that the industry itself is fragmented, Duff noted.

He reinstated his confidence in digital assets, but at the same time, noted that investments and partnerships needed to build the right environment for liquidity.

The day ended with the Cyberport Entrepreneurship Programmed Graduation Ceremony 2020, which recognized over 300 entrepreneur graduates. These graduates emerged from Cyberport’s Creative Micro Fund, Incubation Program, and Startup Alumni Association.

“These programs represent three essential stages at the beginning of one’s entrepreneurial journey,” Cyberport Chairman George Lam said in his welcome address.

Commending the graduates, he added that the challenges they faced were tremendous, but they also had significant opportunities ahead of them. He also expressed his desire to see unicorns emerge from the graduate pool.

The event also co-presented the Edventures Global Business Acceleration Summit with Esperanza and Silicon Dragon 2020 as spotlight events on Day 2.

The unsaid rules governing innovation worldwide are in flux. Hong Kong is especially at the precipice of structural change, both from a tech and geopolitical perspective. In this context, Cyberport Venture Capital Forum enabled critical conversations on this front.

Much like graduates of the Cyberport Entrepreneurship Program, the region itself is looking at distinct challenges ahead. And in the same vein, it is also faced with opportunities for growth, both local and across borders.

Header image courtesy of Cyberport Venture Capital Forum

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