HSBC First Australian Bank to Release A$228m Venture Debt Product
(27 November 2023 - Australia) HSBC has released a new A$228 million venture debt fund focused on supporting the Australian start-up sector.
The move marks a significant step in bridging the challenging funding gap for late-stage ventures in Asia Pacific (APAC).
Venture debt is a loan to high-growth venture-backed start-ups, which struggle with meeting the criteria for typical loans. Rather than an equity investment, venture debt allows entrepreneurs to raise capital without setting a valuation or diluting their ownership stake.
Alongside extending funding capital, HSBC's venture debt offering includes specialised banking services designed to cater to the unique needs of firms in the technology space. These services feature application programming interfaces (APIs), digital payment systems, access to HSBCnet, and an efficient digital onboarding process.
"The bank has a successful track record in venture debt through its operations in the United States and recognises the need for such financial instruments in sectors such as Software-as-a-Service (SaaS) and climate technology" commented HSBC Australia Technology Sector Lead, Alan Watters.
“Based on the conversations we’ve been having with all the various participants in the ecosystem, there is definitely a place for a global bank of the calibre of HSBC to come into the market. We’re a bank, we’re here to assess risk. We look at the founders, the business model, the market opportunity and how they can execute into that market.”
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