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Charles Li Xiaojia, former CEO of Hong Kong Exchanges and Clearing, during an interview at the Post in August 2021. Photo: Nora Tam

Micro Connect, former HKEX CEO Charles Li’s investment platform, raises US$70 million in new funding

  • Micro Connect’s Series B round includes investments from Sequoia Capital China, Adrian Cheng and Li Ka-shing’s Horizons Ventures
  • Platform focused on providing financing to micro and small businesses in China

An investment platform co-founded by the former top executive of the Hong Kong stock exchange operator raised US$70 million in Series B funding and completed more than 100 investments in micro and small businesses in China, the company said.

Micro Connect was launched last August by Charles Li Xiaojia, the former CEO of Hong Kong Exchanges and Clearing (HKEX), and financier Gary Zhang. Li retired from HKEX at the end of 2020.
“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 grass-roots economy,” Li said in a statement on Thursday.
In its oversubscribed Series B funding round, Micro Connect attracted investments from Sequoia Capital China, which also took part in its Series A funding, as well as new investors, including ABC International, New World Development CEO Adrian Cheng Chi-kong, Li Ka-shing’s Horizons Ventures, Lenovo Capital and Vectr Fintech.

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Former HKEX chief unveils new foreign investment platform to finance Chinese small businesses

Former HKEX chief unveils new foreign investment platform to finance Chinese small businesses

Micro Connect has raised US$120 million in its two funding rounds.

“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,” Zhang said.

The company said it would use the proceeds from its latest capital raise to scale up its partnership network and capital-deployment capability in mainland China, enhance its technology and further build out its market infrastructure for global investors.

Micro Connect is focused on providing funding to micro and small businesses in China by connecting them with global investors. The platform offers direct financing opportunities, as well as opportunities to finance pools of small companies.

There are some 20 million small and medium-sized enterprises in China and small businesses as a whole accounted for 80 per cent of non-government employment in the country in 2019.

“We are very excited about Micro Connect’s mission,” Horizons Ventures said. “It resonates well with an investment thesis we have been developing for the past 2 years – start-ups that ingrain the concept of ‘respect, dignity and self reliance’ into their business model.”

Micro Connect has a headcount of nearly 100 professionals, including an on-the-ground presence in the mainland to help with investment sourcing and capital deployment, as well as its capital markets team in Hong Kong.

The company said it has invested in more than 100 micro and small businesses in 15 sectors, including food and beverage, retail and cultural and sports industries, in more than 10 provinces and municipalities in China.

The platform is aiming to make more than 1,000 investments by the end of this year, and 10,000 investments in 2023, Micro Connect said.

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