ProDigital Future, an equity fund established in Hong Kong, seeks to raise $100 million to invest in early-stage Web3 businesses targeted at the local market, with a particular emphasis on entrepreneurs in the digital asset space.
- ProDigital Future, a Hong Kong-based equity fund, intends to raise $100 million to fund Web3 startups.
- ProDigital Future seeks to invest in Web3-related digital asset firms in the local market, especially those with ties to China.
- Australia, Singapore, Europe, the US, and Hong Kong are more regions where ProDigital Future plans to operate.
Hong Kong-based ProDigital Future Fund
ProDigital Future is a new fund established by Curt Shi, a seasoned digital investor, and SAIF Partners, a Hong Kong-based equity firm, to support early-stage Web3 businesses targeting the local market. Aiming to raise $100 million by the end of 2023, the fund has finished its half-year fundraising phase with around $30 million in its coffers. The firm has previously invested in six digital asset initiatives alongside the Australian digital football league One Future Football and metaverse business GigaSpace.
Background: Hong Kong’s Crypto Market
The Hong Kong government first suggested developing its measure to control cryptocurrencies in October 2022. The Securities and Futures Commission of Hong Kong published a proposal on February 20, 2023, for a licensing system for cryptocurrency exchanges that would go into effect in June. The regime recommends a mandatory licensing process and demands that prospective market participants fulfill several requirements, such as the secure storage of assets, Know Your Customer, Anti-Money Laundering, and Combating the Financing of Terrorism rules. These actions show the Hong Kong government’s readiness to accept the crypto market.
ProDigital Future’s Investment Plans
ProDigital Future seeks to invest in startup and developing businesses, especially Chinese-affiliated tech firms making the shift to the Web 3. Web3’s proponents define it as a decentralized internet powered by open blockchains. The fund would embrace Hong Kong and its regulations while concentrating on the regional market. But in addition to being present in Europe and the US, it plans to be in Australia and Singapore.
The firm has previously invested in six digital asset initiatives alongside the Australian digital football league One Future Football and metaverse business GigaSpace. Sunwah Kingsway Capital Holdings Ltd. and Golin International Group Ltd. have joined the first close, and ProDigital Future has at least $30m in funding commitments.
Challenges and Opportunities
Although financing has been “pretty smooth,” investors have been wary of investing in new cryptocurrency businesses, according to Curt Shi. Many Hong Kong families interested in the digital economy took part, but there were also some Chinese family offices investing in Australia and Singapore. Hong Kong is actively pursuing cryptocurrency startups and talent to revitalize the financial hub following a slump brought on by three years of border limitations tied to Covid. In contrast to the city’s support for cryptocurrency exchanges, the US regulatory landscape has been highly scrutinized since FTX collapsed last year. There are worries that Hong Kong might one day change its strategy.
The aim of ProDigital Future to generate $100 million for investments in the digital asset sector is encouraging and indicates that the Hong Kong cryptocurrency market has room to develop. The fund wisely chose to concentrate on early-stage and growing businesses, particularly tech firms with connections to China that are shifting to Web 3. Yet, it still needs to be determined how Hong Kong’s regulatory climate will impact the development of the cryptocurrency industry there. Yet, the founding of ProDigital Future demonstrates that there is still a need for investment in Hong Kong’s cryptocurrency sector, and the area is ready for further expansion.