Looking back to move forward

As the year comes to a close, I decided to take a moment to reflect on 2017 in order to move forward and make plans for the new year.

2017 has been a huge year for WHub; the community, the team, and the business has expanded. The startup ecosystem kept growing exponentially. Also, I was engaged in many great new communities; from the launch of FinTech Association of Hong Kong, the growth of the FrenchTech community in Hong Kong and Shenzhen, to becoming a French Foreign Trade Advisors. On a personal note, my passion for trail running came out.

China

The Big Four

The Chinese digital economy is dominated by the four giants: Baidu, Alibaba, Tencent (known as BAT), and Xiaomi.

Tencent and Alibaba now feature among the world’s Top 10 companies by market capitalisation.

Tencent, listed in Hong Kong and famous for its games and WeChat messaging service, even became the first Asian firm to break into the US$500 billion league last November, briefly overtaking Facebook as the world’s fifth biggest company in terms of market value.

Similar to GAFA – Google, Apple, Facebook and Amazon – it is becoming progressively difficult to determine what industry the four dragons belong too. 

Online Spending

Alibaba held an annual sales promotion during China’s “Singles’ Day”, where consumers spent a record USD 25 billion on November 11; 40 per cent up from last year compared to only USD 5 billion for the US equivalent, “Black Friday”.

New Business Models that really Works

Unlike Facebook, Tencent earns most of its money from selling virtual items to its millions of users rather than selling their eyeballs to advertisers.

WeChat users pay for emoticons they send to friends, and players of its slash-and-burn hit game Honour of Kings purchase new outfits for their characters from 30 yuan (USD 5) and up.

Cashless Society

China is a among the most advanced cashless societies with its mobile payment applications WePay and Alipay, which are rousing hundreds of millions of Chinese go cashless for everything from groceries and eating out to water bills.

Shenzhen 

Shenzhen, China’s Silicon Valley, continues to grow as one major Tech citiy in the world, with an investment of 64 billion yuan (US$10 billion) for research last year. Great youtube video to learn more about this tech hub

One Belt One Road Initiative

According to legend, the Silk Road reaches back three millennia. The demand for silk was so intense that a vast network of trade roads emerged from China through India to Europe and Africa, connecting the West and the East.

At present, President Xi Jinping’s initiated an upgrade of this legend to the 21st century “Silk Economic Road”.

The project encompasses 65 countries in Asia, Europe, and Africa, which collectively includes 4.4 billion people. With a USD 900 million investment, this plan is very ambitious, building roads, rails, ports, pipelines, and a maritime route. This should also help China’s tech dragons expand outside of China and conquer new markets.

Bitcoin strikes back

A year back, numerous people stopped using the word “Blockchain” for DLT (Distributed Ledger Technology). Although it is true that a Blockchain is a Distributed Ledger, only few people are actually aware of the difference, and it seemed more as though people wanted to escape Blockchain’s bad reputation and association with the evil Bitcoin – often associated with illegal activities and fraud.

ICO

A new cool kid on the block suddenly stepped in and captured all the attention: ICOs, Initial Coin Offerings or Token Sales. Just this year, ICO funding reached more than USD$4 billion, up sharply from USD$225 million in 2016. To put this into perspective, the amount of money raised by start-ups though ICOs has surpassed early-stage venture capital (VC) funding for tech companies.

Despite China triggering a temporary market crash after regulators decreed that ICOs were illegal along with South Korea later banning domestic start-ups from engaging in this fundraising model, ICOs continues to receive increasing traction.

Can you believe that a blind investment in every ICOs in 2017, including those that have failed, would have generated an average return above 1300 per cent?

(more about ICOs in the “Best Practices for Token Sale” by FTAHK)

Bubble

Bitcoin reached 20,000 and performed over 2,000% in less than a year, and according to Google Trends, global searches for “buy Bitcoin” has overtaken “buy gold”.

To those who compare Bitcoin to the tulip bubble in the 17th century, I would like to remind them that, in 2017, Holland exported two-thirds of the world’s flowers (many of which are tulips).

To those who say Bitcoins are only utilised for illegal activities and fraud, please keep in mind that 90 per cent of US bills carry traces of cocaine.

Japan

Among Asian countries, Japan is the most advanced in its approach to cryptocurrencies, having recognised the virtual currency as a legal tender in April 2017; Japan’s Financial Services Agency (FSA) has approved 11 cryptocurrency companies. For example, some Japanese companies are paying their employees in Bitcoins, and more than 260,000 stores accept payments in Bitcoins.

Regulatory and Legal Framework

By definition, Blockchain applications, and therefore Bitcoin, operate on multi-jurisdictional environments. This creates an ongoing challenge for regulators, tech companies, and users. With Bitcoin up, it generates a lot of interest from tax authorities as well. DLT is a good opportunity to develop more collaboration between regulators, tax authorities, and the government in general.

-> Great article about how different regulators and governments are regulating Bitcoin and other cryptocurrencies.

The disruptor being disrupted

ICOs and Bitcoins are primarily based on Blockchain technology, but it seems even blockchain is being disrupted by a newer, faster, fairer, and more robust system: Hashgraph, the technology to watch out for in 2018.

What the FTAHK

At the beginning of the year, a few people gathered with the idea to launch a not-for-profit FinTech Association of Hong Kong. Since consistency is key, we convened every Wednesday morning at 7:30am.

After a few hesitations on the name, FAHK, and six months of hard work, the association launched in June, and we are proud to have more than 650 members from over 100 companies. The association gathers all the different players in the FinTech scene from incumbents, tech companies, start-ups, SMEs, lawyers, accountants, individuals, and students. 

Hong Kong is finally emerging from a Financial Business Centre to a global FinTech hub.

There are still many challenges to solve, and it is only the beginning of a long and exciting journey. 

FinTech is meant to reach as many people as possible, and in order to achieve this goal, we require a clear guidance on boarding client/KYC/AML framework that can be entirely digitalised.

With the renaissance of AI and machine learning, we need to fill the gap between what is possible technologically and what is acceptable legally. Who will be legally responsible?

As always, collaboration is key. The key challenges for FinTech regulation in Asia and Europe are GDPR, MiFiD II, KYC rules, matching regulation with technological developments, and restrictions on capital outflows. Data ownership and enabling trust in systems are key for the growth of FinTech (another application for blockchain?).

-> More about HK FinTech in WHub’s “white paper on HK FinTech Startup Ecosystem”.

Hong Kong Startups

With only 10% of start-ups being in FinTech, Hong Kong is actually a very diverse start-up ecosystem.

Although WeLend and TNG Wallet made the headlines, raising USD 220 million and USD 115 million (setting a new record for series-A fundraising), Hong Kong is the springboard for start-ups to test their Minimum Viable Product (MVP) and expand to South East Asia or even China. With an ultra-connected population of 7 million habitants, Hong Kong is ranked first among the freest economies in the world. Hong Kong’s service-oriented economy is characterised by its low taxation, almost free port trade, and technological infrastructure. Strategically located at the heart of Asia, Hong Kong is connected to half the world population within five hours of flight time, opening the possibility for rapid expansion and international growth.

A few examples of start-ups successful fundraising this year are as follows:

• USD 227m for the AI start-up SenseTime
• USD 125m for the travel and hospitality tech specialist Tink Labs 
• USD 100m for the logistics tech, Lalamove 
• USD 50m for the financial marketplace, CompareAsia 
• USD 40m for the HealTech, Prenetics 
• USD 30m for the travel startup, Klook
• USD 18.75m for ANX International’s OpenANX ICO – USD 14 million on the first day
• USD 9m for the bike-sharing company Gobeebike
• USD 7m for the AI-powered investment management platform, MioTech
• USD 6m for the door-to-door storage service, Boxful

Hong Kong logistics company, GoGoVan, has agreed to a merger with 58 Suyun, the freight business of mainland Chinese online classifieds giant, 58 Home. Let’s also keep an eye on the promising Gatecoin, Shopeline, Easyship, Grana, Notey – 18 Hong Kong Startups to watch in 2018.

We should hopefully see more of these in 2018, as Hong Kong has launched a HKD 2 billion (USD 256 million) fund to encourage investment in local innovation and technology start-ups last September.

WHub

WHub grew exponentially to become the Hong Kong’s biggest start-up community, gathering more than 70 per cent of the ecosystem. Hundreds of start-ups were recruited through our platform or at our Job Fairs – the latest Job Fair being at HK Exhibition Centre for Entrepreneur Day. 

WHub proudly represented Hong Kong at the Web Summit in Lisbon, meeting key leaders from other ecosystems.

As part of WHub’s mission to build meaningful connections to drive innovation, WHub strengthened collaboration between start-ups and corporates with an exponential increase of services, from Hackathons, workshops for top executives, start-up scouting, events, and reports.

In 2018, we will pursue our mission to foster the start-up ecosystem and economy by helping entrepreneurs raise capital, creating employment, and building innovation that is changing our daily lives.

-> More about HK startups in WHub’s “white paper on HK Startup Ecosystem”.

1,800km Trail Running

With all the technology we are surrounded by, it is sometimes a necessity to reconnect to nature. I have never been an avid runner, but I found myself running increasingly this year, until the point I realised that I have actually run more than 1800 km this year alone. Just like with entrepreneurs, you discover a new community of crazy passionate people.

Trail running and entrepreneurship have a lot in common:

• Consistency is key.
• The top is further than it looks.
• It is all about the journey, not just the destination.

I found myself running more than 60 km every week at some point. You don’t need anything expect a pair of running shoes, and I can run anytime of the day – 4am or midnight. It is the moment; you forget and focus at the same time; the moment you almost leave technology behind (although I am still addicted to my Garmin and Strava) to connect with nature again (yes, even in Hong Kong). 

Trail-Running is the best idea-generating power.

Passion & People

#StartupPassion is WHub’s tagline. Carved out of our passion for entrepreneurs, their strength and deep belief in their mission, both Karena and I are passionate people. We live, breath, and speak about new technologies, business models, scalability, and disruption all day.

But at the end, it is all about the people and the team. 

Death is also a part of life, and a part of my childhood disappeared with the death of three French people. 

Simon Veil, feminist icon and holocaust survivor, is among the most inspiring French woman responsible for advancing woman’s legal rights in France. Jean d’Ormesson, one the youngest member of the Academic Fran?aise, well known for his lively blue eyes, set an example by living life to its fullest. He published over forty books and sponsored Marguerite Yourcenar, the first woman to join its elite numbers. As the French president tweeted, “He was the best of the French spirit, a unique mix of intelligence, elegance and mischief”. Johnny Halliday was the ultimate French rock star and a legend. I had never been a fan, but I realised I knew almost all of his songs –he was a part of my childhood.

My two kids will grow up with different role models, but I do believe they are on the right track when they think IFC means “International FinTech Centre” and Tesla is their favourite car. They are the ones keeping me updated with new hit songs and concerts we need to go to. With all the time we spend working hard, family is always the place we go back to for recharging our batteries.

This year has again been full of encounters that inspired, challenged, strengthened me. Some of the people I had met through work actually became mentors or friends. Entrepreneurship is like an ultra-trail, and you cannot survive it alone. 

I cannot mention “Passion” and “Friends” without saying a word about my co-founder and partner in crime. Because of our similar names, people often get confused between us, which always makes us laugh. Once again, we have spent countless sleepless nights working or partying. We have been to Lisbon, Nepal, Paris together for work or crazy ultra-marathons. Our start-up is based on a strong foundation, which has grown thanks to a trustworthy, hardworking, dedicated team.

This post is a good opportunity to thank all the people that have made this year a huge rollercoaster: Karena Belin, Gram Milosevic, Diane Mensah, Nicolas Breitburd, Heather Lo, Sylvie Davidson, Diane de Beaudrap, Fabrice Fischer, Kristi Swartz, Karen Ng, Benedicte Nolens, Itai Damti, Charles Spierer, Paul Amsellem, Henri Arslanian, Jean-Luc Gustave, Maaike Steinebach, Syed Musheer Ahmed.