Hong Kong's Micro Connect raises $458m Series C
Hong Kong’s Micro Connect, a financier for micro, small, and medium-sized enterprises (MSMEs), has raised USD 458m in Series C funding. It did not name the investors.
The company said in a statement that it secured commitments from new and existing backers from Europe, North America, the Middle East, and Greater China. Among them are private equity and venture funds, university endowments, internet platforms, and consumer retail groups.
Micro Connect received early backing from HongShan (formerly Sequoia Capital China), which re-upped in a USD 70m Series B last year. ABC International Ausvic Capital, Chuang’s Capital, Dara Holdings, Horizons Ventures, Keywise ARCHina Fund, Lenovo Capital, Vectr Fintech, and Adrian Cheng, CEO of Hong Kong-listed New World Development also took part.
The company has raised USD 578m since its inception in 2021.
Micro Connect is the brainchild of Charles Li and Gary Zhang. Li is best known for serving as CEO of Hong Kong Exchange & Clearing from 2010 to 2021 when he developed a reputation as a financial markets reformer. Zhang is founder of Hong Kong financial services provider Oriental Patron.
Micro Connect offers a fund platform and structured product services that connect global capital with Chinese MSMEs in food and beverage, retail, services and culture and sports. It has invested in more than 2,400 stores and 169 brands in all 31 provinces and across 166 cities.
The model is portrayed as a new alternative to impact investing. Micro Connect claims to support 10m workers to achieve annual incomes of CNY 10,000 (USD 14,000) and help 100m people achieve their social and economic aspirations. The company has invested in more than 2,400 stores and 169 brands across 166 cities.
The Series C proceeds will towards the launch of Micro Connect Macao Financial Assets Exchange (MCEX), which is touted as the first licensed global exchange for trading revenue shares. It is envisioned as an inclusive market that supports grassroots entrepreneurship and increases job opportunities.
MSMEs on MCEX raise money via revenue-sharing assets called daily revenue obligations, or DROs. These are said to give investors direct and diversified exposure to the daily and transparent cash flows of investee businesses while making capital more accessible and affordable to business owners.
“By leveraging China’s leading digital economy, [MCEX] will reshape the global financial landscape,” Li said in a statement coinciding with the exchange's initial launch last March. An operational launch is slated for August.
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