FundPark Gets $250 Million for Chinese Working Capital Projects

Hong Kong-based FinTech FundPark reportedly obtained a $250 million private loan led by HSBC.

The loan is the second investment of this type FundPark has received this year, Bloomberg reported Monday (June 24).

It comes from HSBC’s $3 billion “new economy” facility, which is focused on technology and healthcare in Hong Kong and mainland China, said Hay Yip, FundPark’s chief strategy officer and chief of staff, per the report.

Most of the loan — $200 million — comes from HSBC, and the remainder comes from other partners. It follows another $250 million loan from senior lender Goldman Sachs and other partners in January.

FundPark provides working capital to companies, primarily small- and medium-sized eCommerce firms in China.

There is a working capital revolution happening now that “is increasingly driven by innovation and made more necessary by the macroeconomic backdrop, particularly for those middle-market firms generating annual revenues between $50 million and $1 billion,” PYMNTS wrote last month.

As more companies seek out and put outside capital to work, they are learning that today’s working capital solutions are offering them the cash flow requirements necessary to meet the day-to-day needs of their businesses, along with the flexibility to scale and thrive in the long term.

“The tightening of monetary policy and inflationary pressures have suddenly made a lot of these corporates realize they need working capital for two reasons,” Chavi Jafa, head of commercial and money movement solutions, Asia Pacific, at Visa, told PYMNTS. “One, for short-term working capital to make sure that they don’t have any operational disturbances. And two, for strategic long-term investments into newer technologies and digital solutions.”

“In a lot of emerging economies, [we are seeing] a leapfrogging of technology and digital-first solutions, and it’s this corporate segment that tends to drive a lot of the growth in digital economization — they need that working capital to invest,” Jafa added.

When compared to traditional working capital solutions that include overdraft facilities and working capital loans, today’s alternative offerings, such as virtual cards, have become increasingly important for organizations in search of sustainable growth.