HONG KONG — Singaporean sovereign wealth fund GIC and Chinese securities company Guotai Junan International are taking a minority stake in MioTech, a Hong Kong startup that uses artificial intelligence to generate data for asset managers and investors around Asia.
Jason Tu, co-founder and chief executive of MioTech, did not disclose the terms of the deal but said it was multiple times bigger than the previous three funding rounds and that more investment was in the offing. The startup’s previous investment round was concluded in November 2020.
The company plans to use the money to expand product offerings and increase employees, Tu said. MioTech, which has yet to turn profitable, attracted ratings agency Moody’s Investors Service and Hong Kong billionaire Li Ka-shing’s private investment arm Horizon Ventures in the earlier rounds.
“We’ve had rapid growth in the past year,” Tu said. “This investment secures our plans to turn into a full-fledged sustainable ESG tech platform. Besides our financial services business, which is growing rapidly, we are now pushing with products for corporate customers and an app in China for individual.”
The corporate platform will help clients manage and report their ESG — environmental, social and governance — data across subsidiaries and investment. It also will help optimize their carbon footprint through an energy management system. MioTech has begun work with clients in the Chinese mainland and Hong Kong, Tu said.
The startup intends to debut an app in September that lets individuals earn points for carbon reduction and redeem them for rewards with green vendors, he said.
MioTech looks to boost staff to as many as 300, from 150 now. Half the new hires will be in Shanghai, for the research and development team, with the rest going toward sales, marketing and business development across offices in Hong Kong, Beijing and Singapore, Tu said.
MioTech’s algorithm-driven services evaluate companies — and their suppliers and shareholders — on ESG by tapping into databases including Chinese provincial records on chemical spills, labor strikes and enforcement penalties, as well as social media posts and news articles.
Regulators in the region have strengthened ESG requirements for financial institutions. These requirements, compounded by the coronavirus pandemic, have led to higher awareness of responsible spending among investors and boosted demand for MioTech’s services.
“Equipped with industry-leading artificial intelligence technologies such as natural language processing, MioTech has greatly reduced the difficulty of collecting and processing underlying data in such fields,” said Peter Chiu, managing director of the Guotai Junan International Private Equity Fund. The company plans to work with MioTech “to draw a broader blueprint for ESG finance,” he said.
MioTech was established in 2016 with seed funding from Chinese venture capital group ZhenFund. Other investors include HSBC; Li Zhiguo, CEO of Hangzhou-based mobile app developer Wacai; and Simon Loong Pui-chi, co-founder and chief executive of Hong Kong internet finance company WeLab.