A Hong Kong fintech startup is looking to upend the ways other startups find government grants, and hoping to turn that into a broader business of managing the financial needs of small businesses.
“New and existing businesses need a data source that’s digital,” says Jenny Au, co-founder of FundFluent. Her team uses optical-character recognition (OCR, a type of text-reading artificial intelligence) to turn structure information from a variety of sources, from bank statements to GoogleAd accounts.
Then it sells that information back to businesses via an API to show them what government programs they’re eligible for.
Au, a former consultant, was part of the HSBC Serai digital trade-finance project. During Covid, the bank pulled out of SME financing, which triggered her decision to go independent. Au says FundFluent was initially founded as a loan aggregator. In the process of sourcing financial help from the government, she experienced how confusing the process can be. “It’s hard to navigate government websites and know what you’re eligible for.”
She and her co-founder, Wilson Tai (a credit officer at Serai, and then head of customer insights at Prudential Hong Kong), pivoted FundFluent to use AI and a lot of data aggregation to turn it into a subscription-as-a-service provider to help other startups tap funding.
There already exist funding agents that do the same thing, but they will charge companies 10 percent to 15 percent of the grant money. “These programs are supposed to help SMEs, but then people end up paying 15 percent just to get the funding,” Au said. “We want to end that kind of business.”
But are companies really going to pay a subscription for such information? And how can FundFluent hope to scale if its expertise is too niche, rooted in deciphering one city’s government programs?
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The government grant piece is meant to just be a foundation for a broader business of an AI-led project manager for various types of funding and services to SMEs and startups.
“We’re also looking at using this to secure alternative financing and revenue-based loans,” Au said. FundFluent is partnering with other fintechs to help direct services to its users, such as ChocoUp for e-commerce revenue-based funding, and Reap for business credit cards. It is also expanding into payroll financing and other forms of invoice financing. FundFluent isn’t trying to become a SME credit platform, but plug small businesses into the right fintechs.
She says she is in talks with virtual banks as another lending source, and hopes to have a deal struck by the end of the year.
FundFluent is launching a series of informational services to get a foot in the door, that helps SMEs automate how they discover funding, and then charge a fee for services transacted on the site.
The subscription model is not aimed at SMEs per se but at service providers to SMEs who are looking to add value. For example, a digital recruitment firm can use FundFluent to determine whether a particular hire – say a local versus an expat – might also bring some government grant money. Packaging this kind of information could help their business by not only placing talent but helping small businesses mitigate the costs of new hires.
“We’re embedding finance into non-financial companies, instead of trying to create another platform,” Au said.
She is also planning to expand beyond Hong Kong, into Singapore and Australia this year. The hardest part is trying to remain a digital business while doing so. Local markets require partnerships, and appointing responsible officers.
But being digital at the outset makes such expansion conceivable for such a young startup, Au says.
“I can’t track new funding options or scale without AI,” she said. “It’s a phenomenal way to set up a company. We’re early enough to be AI-first.”
Some of what she does sounds like venture capital incubation. Au says there may be a point where FundFluent expands its services to include sourcing VC money, or helping VCs find startups. That’s a ways off yet.
So is FundFluent’s own sourcing of VC money. Currently it’s bootstrapped by Au and Tai, with a pre-seed round in the works. After her experience with Serai, Au says she is wary of getting too institutionalized.
“I’m not building for an exit,” she said. “We’re sticking to the vision of helping SMEs.”