HSBC India has significantly increased its funding program for local tech startups to $600 million, reflecting the bank’s confidence in the sector’s growth and the increasing demand for global exposure among Indian firms. This expansion builds on HSBC’s strategy of targeting mid-market companies in India, specifically those with turnovers between ₹500 crore to ₹4,000 crore ($50-500 million) by Ajay Sharma, MD and head, commercial banking, HSBC India.
The funding initiative, which began in 2019 with a $50 million allocation, was raised to $250 million in 2022 and now stands at $600 million. Of this current corpus, 50% has already been allocated. A key factor driving this expansion is the Indian government’s investment in digital infrastructure and the widespread availability of affordable data, which has fueled the growth of tech startups.
The funding covers various sectors, including B2B commerce, consumer tech such as used car platforms, fintech, direct-to-consumer, agritech, logistics, and electric vehicles. HSBC India engages closely with venture capital providers, participating in Series A, B, and C funding rounds, helping startups transition from experimental phases to more established business operations.
Despite the funding challenges faced by startups over the past 18 months, HSBC’s portfolio has remained resilient. Unlike equity funding, HSBC focuses on providing working capital finance, helping startups manage operational needs during growth phases. The bank’s strategy aligns with companies that are expanding internationally, leveraging its vast transaction banking capabilities to support cross-border operations and foreign exchange requirements.
HSBC aims to continue expanding its funding for tech startups, maintaining growth in its SME portfolio despite broader economic uncertainties. The bank’s commitment to the sector underscores its belief in the transformative potential of Indian startups and their increasing role in the global market.