17 January 2020
Horizons Ventures co-founder Solina Chau says the firm is interested in projects using big data to solve financial problems. Photo: EJ Insight
Horizons Ventures co-founder Solina Chau says the firm is interested in projects using big data to solve financial problems. Photo: EJ Insight

Horizons Ventures eyes investment in financial technology

Horizons Ventures, a private investment arm of tycoon Li Ka-shing, is likely to invest in a financial technology start-up in the near term after investing in three financial technology companies, according to a source close to the Li Ka Shing Foundation.

The three are Bitpay, Welab and Friendsurance, which is a peer-to-peer insurance firm.

Solina Chau, a co-founder of Horizons Ventures, said there are investment opportunities in financial technology but fintech, as the sector is commonly called, is not the main focus for the venture capital firm which manages the investment of the Li Ka Shing Foundation. 

Compliance costs in banks “have surged 300 percent after the financial crisis in 2008”, Chau told reporters on Wednesday in Shanghai. This illustrates a good opportunity for investing.

But “we will definitely not go into the lending [and gambling] business”, she said. “In fact we have rejected quite a few companies although they have good growth prospects.

“But we will be interested in [projects] using big data to solve financial problems.” 

Li is supporting 50 start-ups with the potential to transform the markets, Singapore’s Straits Times reported Sunday. The fund typically takes 15 to 30 percent stakes in those start-ups.

Chau said Horizons would invest in projects based on two criteria: whether they are data clustering related and disruptive.

Disruptive technology is any innovation that helps create a new market and leads to an overhaul of existing industries.

Li is upbeat about the future of disruptive technology. 

“We are now in a data-driven, talent-centric economy where the word ‘disrupt’ has become a movement,” The Straits Times quoted him as saying.

Another sector that Horizons is interested in is food technology.

“We are interested in anything related to one’s stomach and we will definitely look for technology [in this direction],” Chau said.

Seven start-ups from the United Kingdom, North America and Israel showcased their technologies, from plant-based meat and leather to brain-sensing headbands for managing stress, in a conference organized by Horizons in Shanghai yesterday.

Two of them are food engineering companies. “They are passionate about tackling the insufficiency in the eco-system, for example, how to make plants taste like or even better than meat, and how to work on intellectual property,” Chau said.

One of them, Impossible Foods Inc., has secured US$25 million from Horizons, one-third of the US$75 million capital it raised. 

The US-based company is developing a cheeseburger with meat and cheese made entirely from plants but which taste like meat and cheese.

“We are planning to make pork, bacon, chicken, lamb and milk next. The texture of these foods is different from beef, but the components are similar,” co-founder and chief executive Patrick Brown said.

Another disruptive firm is Meta Co. which broke even after its first round of sales.

It raised capital from crowd-funding platform Kickstarter a year earlier. The company produced 1,500 Space Glass which sold out in two weeks for about US$700 each. 

Meta’s Space Glass is different from Google Glass, said Raymond Lo, the firm’s co-founder and chief technology officer. “Google Glass will give you certain information from the lenses but our glasses can combine the real world with the virtual one.” He did not disclose the amount of investment from Horizons.

The Li Ka Shing Foundation invited more than 200 students from Shantou University and other Shanghai universities for the conference.

A similar event was held in Singapore on Tuesday. Forty Hong Kong students were invited there.

Li’s second son, Richard Li, recently invested US$50 million in venture capital firm Nova Founders Capital which focuses on investing in fintech start-ups, according to some media reports Tuesday.

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Ayishah Ma is a financial reporter on Greater China issues.