The Greater Bay Area (GBA) Opportunity by Chibo Tang & Karen Wong

1 February, 2021

In 2016, Gobi set its sights on the Hong Kong market when the startup ecosystem was still at its early stages. Being the exclusive General Partner (GP) of the Alibaba Hong Kong Entrepreneurs Fund (AHKEF), we’ve now established ourselves as the most active and influential VC investor in Hong Kong. Our Hong Kong portfolio consists of almost 50 startups covering a broad range of sectors in Artificial Intelligence (AI), Fintech, Consumer, Healthcare, Logistics, Sustainability, and much more. We’ve helped to nurture 3 local unicorns in Hong Kong: Airwallex, WeLab, and GOGOX as well as numerous centaurs, those companies with a valuation of USD $100 million or more.

Outside of the investment space, Gobi is also an active contributor to the local innovation ecosystem. In 2017, we first launched JUMPSTARTER, a one-of-its-kind global startup competition. 2020 was the 3rd iteration of the competition and in the face of extraordinary circumstances presented by COVID-19, the competition has actually evolved to become the world’s largest virtual startup competition. In 2018 we unveiled the HKAI Lab program, an initiative in partnership with AHKEF and SenseTime, and supported by Hong Kong Science and Technology Park (HKSTP), Alibaba Cloud, and Alibaba DAMO Academy. Gobi is also involved in AHKEF monthly Venture Hours, an impact initiative to mentor 6-8 startups each month, and provide valuable feedback and guidance on their business plans and investor pitches.                 

Going forward, we envision Hong Kong to become increasingly integrated with the rest of the Greater Bay Area (GBA) region, and plan to further extend our reach from Hong Kong into the other cities within the GBA ecosystem in the near future.  This stems from our conviction that the GBA represents the most exciting developmental area for innovation and technology in China for the next decade or more.

An Overview of the Greater Bay Area (GBA) Region

The Chinese government unveiled its 13th 5-year plan in 2016, and in it, they first outlined a high-level development plan for the Greater Bay Area (GBA). This essentially provides a blueprint of development for Hong Kong and the rest of the Southern China region for the next decade or more.  In February 2019, the promulgation of the Outline Development Plan for the Guangdong – Hong Kong – Macao Greater Bay Area set the stage for the future development of the GBA.  Given the subsequent regulatory policies and investments in infrastructure, the GBA has been positioned to become the world’s largest and most influential Bay Area economy.  

The GBA region consists of 11 cities in Southern China, or to be more accurate, 9 cities in the Mainland Guangdong province and the 2 Special Administrative Regions (SAR) of Hong Kong and Macao.  As a whole, the region covers a total population of over 70 million people, which is roughly the size of the United Kingdom.  In terms of GDP, the region contributes over US$1.6 trillion dollars, which is roughly the size of Canada or South Korea.

Each city in the GBA will have a unique and important role to play, the sum of which will transform the current economic makeup of the region. Within the 9 Mainland cities, Shenzhen and Guangzhou are the two Tier 1 cities in Southern China with the best universities and leading industries such as innovation and technology, automotive, and electronics.  Other major cities include Dongguan, Foshan, and Zhongshan which are leading industrial, agricultural and advanced manufacturing bases.  Zhuhai is also a Special Economic Zone, and the 3 remaining cities of Jiangmen, Zhaoqing, and Huizhou are the largest in land mass and present plenty of opportunity down the line. The 2 Special Administrative Regions (SAR) of Hong Kong and Macao, are global centers of trade, finance, and tourism.

The Connection Between GBA and Belt & Road Initiative (BRI)

The 21st Century Maritime Silk Road is part of the Belt & Road Initiative (BRI), a global initiative to foster collaboration and 2-way investments between China and 138 countries.  In this context, the GBA serves as an essential strategic hub as one of the primary connection points for the BRI that will transform this coastal region into a high-tech megalopolis.

President Xi Jinping aims to build a rich economic system that integrates financial services, shipping, technology, and innovation. In this sense, these 2 policies will begin to converge, sharing an outward-looking ethos and an emphasis on trade, investment, and innovation that will not only set the tone within China but will extend its influence, reach and impact across the rest of the world.

The Greater Bay Area (GBA) Opportunity 

The overall innovation ecosystem in the GBA remains at an early stage of development.  However, with so many government initiatives and resources focused on promoting innovation and technology, growth is evident and momentum is rapidly picking up.  The number of unicorns in the GBA has skyrocketed from just 14 in 2017 to 43 by 2020.  GBA unicorns include DJI, WeLab, WeBank, SenseTime, Klook, and many more.  Investors have also begun to take notice and the number of new venture capital funds being set up in the region are also far exceeding that of anywhere else in the country, including the traditional VC/PE hubs of Beijing and Shanghai. These numbers are expected to increase exponentially going forward, and there is no doubt that the GBA represents the next big wave of opportunity in China.  

Investors and entrepreneurs everywhere should be looking for ways to capitalize.  At Gobi, we believe the time to invest in the GBA is now. 

About the Co-Author: Chibo Tang, Partner 

Chibo Tang has been investing in early-stage companies in the technology and media sectors in China for over a decade.  He is Head of the Hong Kong office, overseeing Gobi’s Greater Bay Area practice, and manages the Alibaba Hong Kong Entrepreneurs Fund, for which Gobi is the exclusive General Partner.  He’s led numerous investments including Airwallex, WeLab, GOGOX, Urban Revivo, Prenetics, DayDayCook, AutoX, and Sandbox VR

About the Co-Author: Karen Wong, Chief Diversity Officer & PR Director 

Karen Wong is Chief Diversity Officer & PR Director of Gobi Partners, based in Hong Kong where she heads its Public Relations, Diversity & Inclusion, and People & Culture initiatives. She currently focuses on building the Greater Bay Area (GBA) startup ecosystem and is part of Gobi’s GBA practice. Karen also co-manages the Gobi Internship Program which aims to inspire youth to develop a VC investor skill set and entrepreneurial mindset. 

About Gobi GBA

Gobi Partners is a leading Pan-Asian venture capital firm investing in early-stage startups across a wide range of technology sectors since 2002. We have 13 offices, a footprint that covers Northeast Asia, Southeast Asia, South Asia, and the Middle East. In Hong Kong, Gobi is the exclusive General Partner (GP) for the Alibaba Entrepreneurs Fund (AHKEF), building the Greater Bay Area (GBA) ecosystem. We’re about breaking barriers, levelling the playing field, and providing more access to entrepreneurs across Asia. For more details visit our Website or follow our social media channels: LinkedIn, Facebook, Instagram, YouTube.