Serai aims to be the LinkedIn for global trade which links manufacturers to component suppliers.
In a significant development, HSBC Holdings Plc is backing the launch of Serai, a Hong Kong-based technology startup that aims to “connect small-and-medium-sized manufacturers with component suppliers in different parts of the world as part of its trade banking push”.
Serai is a wholly-owned subsidiary of Europe’s biggest bank by assets. It has begin formal operations last week. It is part of HSBC’s CEO John Flint’s plan to invest $15-$17 billion by 2020 on technology to boost growth.
“Navigating international markets as a small-and-medium-sized company is still a nightmare. And the real pain point is business-to-business (transactions),” said Vivek Ramachandran, chief executive of Serai.
“So, if you have got Facebook for your personal network, LinkedIn for your professional network, Serai is for your company,” explained Ramachandran, who previously worked at HSBC’s commercial banking unit for more than three years.
Serai is the first investment by HSBC in a non-banking technology startup. It could very well be the key driver of HSBC’s future revenues, which earns the bulk of its revenue in Asia, thanks to Serai providing access to new clients for its banking services.
The development is part of a global effort by banks to boost tech investments that facilitate and aide financing trade, managing cash and making payments; it comes midst growing competition and a shift in cross-border supply chains.
Details of HSBC’s investments in Serai were not disclosed.
Ramachandran went on to add, Serai would initially leverage HSBC’s trade banking client network globally, and then later would expand the coverage to include manufacturers and suppliers who are not the bank’s existing customers.
Serai would also “make small loans to some of the Hong Kong-based small firms to finance their purchases, with plans to launch full-fledged financing solutions and credit insurance later by third-parties”, said Ramachandran.
“The idea is to create a platform where buyers and sellers come together,” said Ramachandran. “You can make connections, and then over time you can access a range of solutions.”