China MSME financier raises $70m
Micro Connect, a China-based provider of financing to micro, small and medium-sized enterprises (MSMEs), has raised USD 70m in Series B funding.
Participants included ABC International, Adrian Cheng - CEO and executive vice-chairman of the Hong Kong-listed New World Development - Ausvic Capital, Chuang’s Capital, Dara Holdings, Horizons Ventures, Keywise ARCHina Fund, Lenovo Capital, and Vectr Fintech. Existing investor Sequoia Capital China re-upped.
The new round brings Micro Connect’s funding to date to USD 120m. The proceeds will go towards expanding its network of partners, developing onshore capital deployment capabilities, and technology upgrades.
It will also support the continued build-out of infrastructure through which global investors can participate in financing solutions. This includes funds, structured products, and an exchange platform.
Micro Connect was founded in early 2021 by Charles Li, CEO of Hong Kong Exchanges & Clearing from 2010 to 2021, and Gary Zhang, founder of Oriental Patron, a Hong Kong-based financial services provider.
They have recruited nearly 100 professionals, including a team in mainland China that handles sourcing and capital deployment and a capital markets team in Hong Kong that serves global investors.
To date, the Micro Connect platform has invested in more than 100 MSMEs in food and beverage, retail, services and culture and sports across more than 10 provinces and municipalities. Investments are revenue-based, typically targeting small local stores.
The company has developed an automated repayment mechanism for daily and digital revenue collection. It plans to scale its portfolio to include more than 1,000 investments by the end of 2022, and 10,000 by 2023.
“We are delighted to welcome a distinguished group of strategic and institutional investors to our community, and look forward to working closely together in supporting Micro Connect in its mission of bridging the gap between global investors and China’s grassroots economy,” said Li in a statement.
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