Venture Capital - Hong Kong

Hong Kong

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The country in Hong Kong is projected to see the Total Capital Raised in the Venture Capital market market reach US$2.07bn in 2025.
In the country, Early Stage dominates the market with a projected market volume of US$1.00bn in 2025.
When compared globally, the United States is expected to generate the most Capital Raised with US$140.5bn in 2025.
Hong Kong's Venture Capital market is thriving, with a surge in fintech startups attracting significant investor interest and funding.

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Europe,
United States,
United Kingdom,
Australia,
Brazil

Capital Raised

Capital Raised Change

NOTES: Data shown is using current exchange rates. Data shown reflects market impacts of Russia-Ukraine war and the bankruptcy of the Silicon Valley Bank.

MOST_RECENT_UPDATE: Mar 2024

SOURCE: Statista Market Insights

Capital Raised

Capital Raised Change

NOTES: Data was converted from local currencies using average exchange rates of the respective year.

MOST_RECENT_UPDATE: Oct 2024

SOURCE: Statista Market Insights

Analyst Opinion

The Venture Capital market in Hong Kong is facing notable challenges, with a considerable decline in growth rates influenced by global economic uncertainties, tightening funding conditions, and shifting investor sentiments towards riskier investments.

Customer preferences: Investors in Hong Kong's Venture Capital market are increasingly leaning towards sustainable and socially responsible startups, reflecting a growing preference for ethical investment. This shift is driven by heightened awareness of environmental issues and social equity among younger demographics, particularly millennials and Gen Z, who prioritize brands that align with their values. Additionally, the rise of digital platforms has changed how consumers engage with products, prompting venture capitalists to focus on tech-driven solutions that cater to evolving lifestyle preferences, such as remote work and e-commerce.

Trends in the market: In Hong Kong, the Venture Capital market is experiencing a notable shift towards sustainable investments, with an increasing number of investors seeking startups that prioritize environmental and social responsibility. This trend reflects a broader global movement where millennials and Gen Z consumers demand alignment between their values and the brands they support. Furthermore, the rise of digital platforms is reshaping consumer engagement, leading venture capitalists to focus on tech-driven solutions that address contemporary needs such as remote work and e-commerce. This evolution signifies a critical pivot for industry stakeholders, prompting them to innovate and adapt to these changing investor preferences and consumer behaviors.

Local special circumstances: In Hong Kong, the Venture Capital market is uniquely influenced by its strategic location as a gateway to Asia, allowing access to a diverse pool of investors and startups. The city's strong financial infrastructure and proximity to mainland China foster cross-border investments, particularly in tech and sustainability sectors. Additionally, Hong Kong's cultural emphasis on innovation and entrepreneurship drives a vibrant startup ecosystem. Regulatory support for green finance initiatives further encourages venture capitalists to prioritize sustainable projects, aligning with global trends while catering to local investor interests.

Underlying macroeconomic factors: The Venture Capital market in Hong Kong is significantly shaped by macroeconomic factors such as the robust economic growth of the region, favorable fiscal policies, and global investment trends. The city's strategic position as a financial hub attracts international investors seeking to tap into Asian markets, particularly in technology and sustainability sectors. Furthermore, the government's commitment to innovation through supportive regulatory frameworks and incentives enhances the appeal for venture capitalists. Economic stability and consumer confidence in Hong Kong also foster a conducive environment for startups, driving increased capital flow and facilitating the growth of a diverse entrepreneurial ecosystem.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on the amount of capital raised, the average of deal size and the number of deals.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use data from OECD, annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, CPI, number of small and medium-sized enterprises (SME), new businesses registered (number) . This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.

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Venture capital worldwide - statistics & facts

Venture capital is the term used to call the financial resources provided by investors to startup firms and small businesses that show potential for long-term growth. It has become a very important source of capital for entrepreneurs, who often have problems with financing their needs through risk-averse banks. Venture capital investments incorporate a high level of risk as only some of the VC-backed companies develop into successful and highly profitable businesses. In 2020, the leading venture capital backed company worldwide was the Manbang Group, which based in Nanjing, China.

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