HONG KONG, March 31, 2022. Micro Connect, the market infrastructure platform connecting global capital with China’s grassroots economy, announced that it has completed a capital raise of US$70 million in its Series B funding round, with participation from Series A investor Sequoia China, and new investors including ABC International, Adrian Cheng, Ausvic Capital, Chuang’s Capital, Dara Holdings, Horizons Ventures, Keywise ARCHina Fund, Lenovo Capital, Vectr Fintech, and others. The oversubscribed round brings Micro Connect’s total funds raised to date to US$120 million, and validates Micro Connect’s long-term vision to develop a new and more inclusive financial market with a new asset class.
In just over a year since its founding in early 2021, Micro Connect has reached several important milestones:
- Operational momentum – Micro Connect has grown its headcount to close to 100 professionals, with on-the-ground presence in the Chinese Mainland to strengthen its investment sourcing, capital deployment and technology capabilities, and a capital markets team in Hong Kong serving global investors.
- Proof-of-concept completion – To date, the Micro Connect platform has invested in more than 100 micro and small businesses, covering 15 sub-sectors in the food & beverage, retail, services and cultural & sports industries across more than 10 provinces / municipalities in China. The completion of the “100 Plan” represents a validation of Micro Connect’s innovative model of combining chain store partnerships with revenue-based investing, from target screening, information discovery, daily and digital revenue collection via the Automated Repayment Mechanism, to cross-border capital deployment and distribution of returns to offshore investors. It sets a strong foundation for the platform to scale its portfolio to include more than 1,000 investments by the end of 2022, and 10,000 in 2023.
- Strong pipeline of investments – Micro Connect has developed a growing network of more than 100 Connect Partners including leading consumer chains and franchises and SaaS companies, through which it has built a strong pipeline of quality store-level investment targets.
- Global investor access – Earlier this year, the Micro Connect China Fund was launched, and started raising capital from global professional investors seeking to participate in the growth of micro and small businesses in China.
Charles Li, Founder and Chairman of Micro Connect, said, “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.”
Gary Zhang, Founder and Vice Chairman of Micro Connect, said, “We are fully excited about our journeys ahead, as we continue to develop the definitive financial technology and market infrastructure to empower micro and small businesses and their owners, and deliver impact to the broader society.”
Micro Connect will use the proceeds from the latest capital raise to scale its partnership network and capital deployment capability onshore, enhance its platform technology, and further build out its market infrastructure to broaden the channels through which global investors participate in the new asset class, including funds, structured products and an exchange platform.
Following a full test-run of the new investment model, and the gradual rollout of various market access channels for global investors over the course of 2022. Micro Connect will also introduce a data analytics platform to connect chains with stores / franchisees and advise on their expansion strategies, and an information platform to offer index, rating, and portfolio construction services to impact investors. Together, these platforms will form a new market and fundamentally change the way financial services are delivered.
About Micro Connect
Micro Connect is a new market infrastructure and financial technology platform connecting global capital with China’s grassroots economy, making capital more accessible and affordable to micro and small businesses. Micro Connect has created Daily Revenue Contracts (DRCs) as a new asset class for direct, granular and diversified exposure to a large number of quality micro and small businesses. It has pioneered the Automated Repayment Mechanism (ARM), a secure, digital way to collect investment returns with real-time transparency. It also partners with leading chains / franchises and SaaS companies (Connect Partners) to identify the best targets at scale, enabling more efficient information discovery and capital deployment. With a vast amount of daily revenue data accumulated over time, Micro Connect develops AI analytics capabilities to continually discover investment insights and optimize capital allocation decisions. Through developing a fund investment platform, tailored structuring solutions, and an exchange platform for direct trading access, Micro Connect offers efficiency and liquidity in small business investing for all types of global professional investors and offers a new alternative to impact investing.
For more information, please visit www.microconnect.com and follow our journey on LinkedIn: Micro Connect, and WeChat: Micro Connect.