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Li Ka-shing leads funding round for Hong Kong fintech startup

MioTech uses AI to evaluate ESG investments for fund managers

Hong Kong's financial district: MioTech, a startup backed by Li Ka-shing's investment company, helps fund managers evaluate assets' ESG criteria.   © Reuters

HONG KONG -- Tycoon Li Ka-shing, the former chairman of CK Hutchison Holdings, has led a new funding round for MioTech, a Hong Kong-based startup that uses artificial intelligence to generate data for investors.

Li's investment company, Horizons Ventures, led MioTech's previous $7 million funding round in 2017.

It was joined this time by a publicly listed media company, said Jason Tu, co-founder and chief executive of MioTech. He declined to identify this investor. The new funding totals a multiple of the first round, but the company did not disclose the figure.

The Hong Kong magnate was an early backer of Facebook and Spotify through Horizons. The company's current investments include plant-based-meat maker Impossible Foods and The Boring Company, Elon Musk's infrastructure venture.

Tu said he expects MioTech to begin turning a net profit on a monthly basis later this year and to achieve a full year in the black in 2021.

Jason Tu, MioTech chief executive

MioTech's client base doubled last year to 50 companies, mostly fund managers, as regulatory changes boosted demand for its services to screen prospective investments on environmental, social and governance -- or ESG -- criteria. Most of its clients are based in Hong Kong, mainland China or Singapore.

Tu said the company will use the new funding to set up offices in Beijing and Singapore, as well as add sales staff in Hong Kong and 10 engineers at its development center in Shanghai.

"As soon as everything was solidified on funding, we started hiring," Tu said. "We are looking to spread out to Southeast Asia."

Last month, the Hong Kong Stock Exchange said it would strengthen ESG requirements for listed companies starting in July. The China Securities Regulatory Commission will adopt mandatory ESG rules later this year.

MioTech's algorithm-driven services tap into databases including Chinese provincial records on chemical spills, labor strikes and enforcement penalties as well as social network posts and news articles to help evaluate companies -- and their suppliers and shareholders -- on ESG grounds.

MioTech launched in 2016 with seed funding from Chinese venture capital group ZhenFund. Other investors include Li Zhiguo, chief executive of Hangzhou-based mobile app developer Wacai, and Simon Loong Pui-chi, co-founder and chief executive of Hong Kong internet finance company WeLab.

MioTech also offers AI-driven screening of prospective wealth management clients for money laundering and other concerns.

Li retired in 2018 as chairman of CK Hutchison, a sprawling global empire of property, infrastructure, retail, telecommunications and energy businesses.

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