FundPark, a Hong Kong-based fintech start-up that provides trade finance for small and medium enterprises (SMEs), has secured US$500 million from Goldman Sachs, the second funding facility from the US investment bank in two years.
Goldman recently doubled the asset-backed securitisation facility to up to US$500 million, from what it provided FundPark in 2022, CEO and co-founder Anson Suen Wai-loi said, adding that it was one of the largest of its kind received by a fintech firm in Asia.
“Goldman Sachs’ decision to upsize up to US$500 million is a combination of how it looks at FundPark’s track record in the past 18 months and how FundPark has the capability to deploy the capital rapidly,” he said.
The company plans to use the investment to provide loans to SMEs, which often have their requests for trade finance rejected by banks, creating a trade financing gap of US$2.5 trillion globally for small business, according to the Asian Development Bank.
Since its inception in 2016, the company has disbursed US$2 billion to 16,500 SMEs, mainly in the cross-border e-commerce sector with US dollar working capital needs. Around half of the loan disbursements happened last year.
Suen said the performance of its underlying portfolio is “sustainable and healthy” and “beat the market benchmark for banks and non-banks”, but did not provide a number.
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FundPark provides loans without typical collateral, such as property, but those are secured by SMEs’ underlying cashflows, inventory or receivables. It employs a proprietary AI-driven credit model to assess borrowers and provide financing solutions based on their needs and credit grading.
The AI credit model can predict clients’ business performance, such as future cashflows and repayment capability.
“Empowered by our in-house built credit model, it is able to continue to evolve itself and better understand a client’s creditworthiness,” Suen said. “That means our solution does not require what a traditional bank requires – traditional collateral or security such as property, etc.”
With the new funding, FundPark will continue to extend loans to the underserved and unserved digital SMEs, aiming for growth similar to last year, he said. It will also continue to invest in its technology and data analytics capabilities and look to provide data insights to clients as a value-added service other than lending.
In addition, the company is eyeing expansion beyond the 15 markets, such as Greater China, Southeast Asia, Europe and the US, where it serves clients. Exporters and importers in China’s e-commerce space will be a focus.
Apart from its Hong Kong headquarters in Kwun Tong, FundPark has offices in Shenzhen and Chengdu.
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Hong Kong fintech start-up offers collateral-free SME loans using AI power
FundPark said it will maintain partnerships with e-commerce platforms such as Amazon and Walmart Marketplace and logistics service providers such as Cainiao to gain more access to SME merchants.
Suen expects the market for trade finance to keep growing as business activities increasingly go online.
“Digital footprint, together with AI technology and data analytics, will allow us to get the data online and respond quickly, and help our digital SME clients scale and capture their future potential.”
“This kind of scalability is exactly something we are eyeing to bridge the huge funding gap.”