Hong Kong Web3 Fund to raise $100 million, will support the city’s FinTech ambitions

Hong Kong investors are launching a new $100 million fund, ProDigital Future, aimed at backing early-stage crypto and Web3 companies, Bloomberg reported Thursday. The move comes as the city continues to redouble its efforts to become a fintech and crypto hub.

Web3-focused ProDigital Fund has already secured $30 million in funding

A new Hong Kong-based fund is looking to secure $100 million in funding in 2023 to invest in Web3 startups as the city continues to restore its fintech hub status in the region. According to Bloomberg, the new ProDigital Future Fund will support early-stage Web3 companies with a focus on the regional market.

ProDigital Future has already raised at least $30 million in funding and plans to put in another $70 million by the end of the year. The fund is led by Ben Ng, a venture partner at Asian private equity firm SAIF Partners, and venture capitalist and entrepreneur Curt Shi. Shi said other investors who recently joined the first close for the Hong Kong-based fund include Sunwah Kingsway Capital Holdings Ltd. and Golin International Group Ltd.

The fund will mainly focus on early-stage and development startups, especially China-linked technology firms transitioning to Web3. ProDigital Future has invested in six digital asset ventures, including Hong Kong-based metaverse firm GigaSpace and Australian digital sports club One Future Football.

So far, the fundraising process has been “relatively smooth,” Shi said, despite investors being wary of committing their money to new crypto projects. He noted that many Hong Kong families interested in Web3 participated in the fundraising, and certain China-based family offices invested in Australia and Singapore.

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Hong Kong’s aggressive support for crypto firms raises concerns

The launch of a new $100 million fund comes as Hong Kong continues its aggressive strategy to cultivate local crypto startups and firms to transform the city into a regional fintech and crypto hub after three years of violence under Covid-related border controls.

Hong Kong has been trying to attract popular crypto exchanges to set up shop in the city instead of the US, which has hit the sector hard in recent months in the wake of the FTX fiasco last year. But some worry that Hong Kong’s aggressive support for crypto projects could backfire.

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

– Curt Shi told Bloomberg.

Earlier this week, OKX, one of the largest exchanges in the world by trading volume, set up an entity in Hong Kong and said it would apply for a virtual asset service provider (VASP) license in the city. OKX is one of the first major crypto companies to be granted a VASP license under Hong Kong’s new crypto-regulatory framework that is expected to take effect in the coming months.

Do you think Hong Kong will achieve its goal of becoming a regional crypto hub? Let us know in the comments below.

About the author

Tim Fries is the co-founder of The Tokenist. He has a B. Sc. in mechanical engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate in the investment team at RW Baird’s US Private Equity division and is also a co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.