HSBC Holdings has shut down a trade platform it launched three years ago in Hong Kong after it failed to build a commercially viable business.
Serai, a wholly owned unit of Europe’s biggest bank, that connected small and medium-sized apparel makers with global component suppliers, confirmed its closure in a notice on its website and said its services would not be available from June 25.
“The decision to wind down Serai follows a thorough business review and is a purely commercial decision,” HSBC said in a statement on Wednesday but did not give details of Serai’s business or its investment in the company.
Serai was HSBC’s first investment in a non-banking tech startup.
Just months after Serai was launched in June 2019, political unrest in Hong Kong triggered protests that dealt a blow to businesses, followed by the Covid-19 pandemic that battered global supply chains.
HSBC Invested $70m in Serai
“We regret to inform you that Serai will be winding down all operations,” it said.
“Despite a huge amount of progress made by the team, it has proven difficult to build a commercially viable business. As a result, we’ve made the difficult decision to close our doors,” Serai said.
HSBC had invested around $70 million into the start-up in the last three years, two sources familiar with the matter said, adding that Serai had started to wind up its business over the last few weeks.
Serai’s platform connected buyers and sellers in the highly fragmented clothing and garments industry.
Veteran trade banker Vivek Ramachandran, who previously worked at HSBC’s commercial banking business, was the CEO of Serai. Last month, Ramachandran returned to HSBC to head its Global Trade and Receivables Finance unit.
Serai’s platform offered financial, environmental, social and corporate governance metrics along with analytics to enable traceability from finished products to raw materials.
- Reuters with additional editing by Jim Pollard
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