Exclusive | Hong Kong an ideal fundraising hub for AI start-ups helped by its connector role, large pool of wealthy investors: European venture firm Hong Kong can be a fundraising hub for AI start-ups as it has deep capital pools and plays a connector role in Asia, and the government could add to the allure by developing a local technology ecosystem, according to a European venture capital firm focused on investing in artificial intelligence (AI). Luxembourg-based Alpha Intelligence Capital’s (AIC) partner Arnaud Barthelemy held meetings with prominent Hong Kong family offices and individual investors last week to raise funds for the firm’s second AI-focused fund, which aims to raise a total of US$250 million. Barthelemy is no stranger to Hong Kong. He was the French Consul General in Hong Kong from 2011 until 2015, after which he quit politics to join the financial sector. His return to the city last week confirmed his positive view on Hong Kong’s credentials as a fundraising hub. “Hong Kong has a very deep pool of capital as the city boasts a large number of ultra-high-net-worth individuals,” Barthelemy told the Post in an exclusive interview. “This is why I am here to meet with investors and wealthy families.” Ultra-high-net-worth individuals refer to those who own at least US$30 million in assets. AIC’s second fund has already collected US$160 million since its launch in early 2022, after its first AI fund, introduced in 2018, raised US$185 million. The first fund was supported by many private European investors, while the second AI fund is likely to see more Asian investors, including large institutional and sovereign investors, Barthelemy said. Asian investors have contributed more than half the capital raised so far, he added. “Hong Kong investors are very interested in our AI-focused fund because they are rightly convinced that AI will have massive implications for many, if not most, industries in future,” he said. AIC invests in AI start-ups in the US, Europe, Israel and Asia but not in mainland China. It has invested in more than 40 AI start-ups, such as Israeli-based Hirundo and UK start-ups Envelope Risk and InstaDeep. “The AI ecosystem in mainland China is unique and specific,” he said. “If you want to invest in China, you need to have a strong local team in the county, which we do not have.” AIC offices are located in several global cities including San Francisco, Paris and Singapore. Barthelemy said AIC may set up a specific AI fund focused on China and Asia start-ups in the future. Mainland China has about 1,500 AI start-ups, making it the second largest market for AI after the US, which has over 5,000. China AI start-ups outnumber those in Israel, the UK, France, Germany and Japan, which have between 300 and 500 start-ups each. Hong Kong itself is not a home base for many AI start-ups at this stage, but the city will be an important centre for the sector because of its connector role. “Hong Kong is playing a connector role for our fundraising in Asia,” Barthelemy said. “If we decide to introduce an AI fund for Asia including China in the future, Hong Kong will be a natural base due to its role as a gateway to mainland China and the rest of Asia.” Barthelemy said he would like to see the Hong Kong government arrange more events to link up AI start-ups with potential investors. He added that Hong Kong may want to create a vehicle to invest in tech start-ups to foster a strong local tech ecosystem along the lines of France’s BPI, also known as Bpifrance. “Bpifrance is a state investment bank that invests in funds and in start-ups based on the business potentials of these companies,” he said. “It will only invest in start-ups that have the potential to scale and generate revenues and does systematically co-invest with private investors.” “This is why France has so many tech start-ups, especially in AI. The model of Bpifrance has been followed by Ireland, Denmark and Italy, which is something Hong Kong government may consider if it wants to encourage more start-ups to use Hong Kong as their home base.” https://www.scmp.com/business/article/3263317/hong-kong-ideal-fundraising-hub-ai-start-ups-helped-its-connector-role-large-pool-wealthy-investors (ICE HONG KONG)

Fonte notizia: South China Morning Post