Greater Bay Area Fund (GBA Fund), an investment vehicle formed by China-headquartered e-commerce firm Alibaba’s Entrepreneurs Fund (AEF), is set to close at about $257m by mid-2022, AVCJ reported yesterday.
Chibo Tang, Global Corporate Venturing 2020 Emerging Leader and managing partner for venture capital firm Gobi Partners, which oversees the vehicle, told Mergermarket the fund has already taken $50m out of the $150m so far committed.
Formed in 2015, AEF is a non-profit scheme intended to encourage entrepreneurship in Hong Kong and Taiwan, with specialised vehicles for each market sized at $129m and $307m respectively.
GBA Fund was first announced in July 2021 and is anchored by Alibaba with backing from limited partners (LPs) including conglomerates, financial services firms and family offices.
The Chinese government began promoting the Greater Bay Area concept – a large region that encompasses various cities in the Guangdong province and the special administrative regions of Hong Kong and Macau, with distinct sets of laws and currencies – in 2017.
A joint report produced by GBA Fund and consultancy Deloitte China called ‘Rekindling Hong Kong’s economic growth through innovation’ quoted Cindy Chow, executive director of AEF Hong Kong, as saying: “There is no doubt that the GBA is one of the crucial platforms to commercialise Hong Kong’s innovation ideas and scale up Hong Kong startups’ development.
“Cross-border business support, particularly legal advice and professional services, should be further strengthened, so that startups could be more equipped to expand into other cities in the GBA.”
Areas of focus for GBA Fund include renewable energy, healthcare, artificial intelligence, robotics and deep technology as well as digitalisation of traditional industries such as manufacturing.
Explaining the structure of AEF, Tang told GCV in 2019 that Gobi’s traditional VC funds count Alibaba and other corporates such as consumer goods conglomerate Unilever, electronics producer Sony, industrial appliance manufacturer Robert Bosch, computing technology group IBM and networking equipment provider Cisco among their LPs.
“However, the AEF that we manage in Hong Kong has a very different structure and one that is more similar to that of an in-house CVC,” Tang continued.
“The fund is branded Alibaba and portfolio companies have full access to the rest of the Alibaba ecosystem. As such, there are some clear advantages that we as the investment manager can leverage – branding and strategic synergies foremost among these.”
Tony Tung, managing director at Gobi Partners and AEF Hong Kong who was part of GCV’s Emerging Leaders roster in 2021, is responsible for the fund’s involvement in the GBA innovation ecosystem. He told GCV: “In [2019], we had been flying around the world and connecting with tech entrepreneurs from different industries and geographies and trying to bring them together to form an international entrepreneur community in the GBA, which had never existed before.”
Alibaba also runs a separate corporate venturing arm in mainland China – variously referred to as Alibaba Innovation Ventures, Alibaba Innovation Investment and Haiyan Ali Venture Capital in English – overseen by GCV Powerlist member Maggie Wu, who is also chief financial officer for the parent firm.
Image courtesy of The Hong Kong Entrepreneurs Fund Limited.
