Hong Kong Fund Aims to Bet $100 Million on City’s Crypto Push

Sarah Zheng, Bloomberg News

A digital screen displays the prices of cryptocurrencies to U.S. dollar in Hong Kong. Photographer: Paul Yeung/Bloomberg , Bloomberg

(Bloomberg) -- A new Hong Kong-based fund plans to raise $100 million this year to invest in digital asset startups, as the city seeks to become a regional fintech hub.

The fund led by Ben Ng, a venture partner at the Asian private equity firm SAIF Partners, and longtime tech investor Curt Shi has secured at least $30 million in funding commitments. Those who joined the first close for ProDigital Future Fund after a half-year fundraising period included Sunwah Kingsway Capital Holdings Ltd. and Golin International Group Ltd., Shi said in an interview.

The fundraising comes as Hong Kong aggressively courts crypto companies and talent to revive the financial center after a slowdown from three years of Covid-related border controls. The city’s support for crypto exchanges contrasts with sharp US regulatory scrutiny in the wake of FTX’s stunning collapse last year, and fears linger that Hong Kong could one day reverse course.

“I understand the concerns, but nothing is perfect given the complexity of the crypto economy and current geopolitical situation,” Shi told Bloomberg News. “Our strategy is to continue to see how things go.”

ProDigital Future will target early-stage and developing ventures, particularly tech companies with ties to China transitioning into Web3, which proponents often describe as a decentralized internet that runs on public blockchains.

So far, the fund has invested in six digital-asset projects, including Hong Kong-based metaverse company GigaSpace and Australia-based digital sports club One Future Football.

Investors have been cautious about deploying capital into new crypto projects, but fundraising has been “relatively smooth,” Shi said. Many Hong Kong families interested in the digital economy participated, but some Chinese family offices investing in Australia and Singapore are also taking part, he said.

“I believe that Hong Kong will continue to have a certain degree of openness and flexibility,” he said. “While our portfolio and fund will embrace Hong Kong and its policies, we will continue to have a presence in Australia, Singapore, as well as in Europe and the US.”

--With assistance from Linda Lew.