Qupital sees opportunity in its home market Hong Kong, where 25 per cent of SMEs are struggling with unpaid invoices
Hong Kong-based fintech startup Qupital has raised a US$2 million seed funding round led by MindWorks Ventures and the Alibaba Entrepreneurs Fund, according to a TechCrunch report.
DRL Capital and Aria Group also participated in the round.
Qupital aims to address the problem faced by “as many as 25 per cent” of small and medium enterprises (SMEs) in Hong Kong are facing: Unpaid invoices.
A huge percentage of an SME’s cash flow is locked up in unpaid invoices which may take up to 90 days to pay out, hampering companies from operating their business.
What Qupital does is channeling a loan to cover around 80 to 95 per cent of the invoice’s value, with its platform connecting these SMEs to potential investors.
The startup plans to use the new funding to geographical expansion and product development.
While Qupital wants to focus on local market at the moment, founder Andy Chan hinted possibilities to expand to new markets such as Vietnam, Taiwan, and Thailand once the startup has raised its Series A.
It is also looking to build a system to support purchase order financing and launch features to enable investors to pay money automatically.
Launched in August 2016, Qupital was founded by Chan and Winston Wong. The startup claimed to have processed 80 trades with a total value of over US$2 million since its launch.
It monetises by charging 0.25 to 0.75 per cent of the total invoice value; it also makes 20 per cent of net gains made by investors.
Qupital also expects to receive returns of around one per cent per month, and aims to reach break-even inside the next 18 months by scaling customer base.
“A friend of mine worked at [now defunct US startup] Receivables Exchange and there are similar businesses in Europe,” Chan said.
“But I saw that in Hong Kong there was definitely an opportunity because there are a lot of trading firms and SMEs whose banks options aren’t enough to cover their capital needs,” he stressed.
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