HSBC India has expanded its funding program for local tech startups to $600 million, reports say, as the UK-based bank braces for strong growth in the sector, prompting more firms to opt for global exposure.

“We realized that there is going to be a lot of growth in the alcohol market and there are 1700 recognized names and how do you go through them systematically and make sure you get the right ones. Our ideals are often those who need our global presence,” said Ajay Sharma, MD and Head of Commercial Banking, HSBC India.

The funding commitment for tech startups started with a balance sheet allocation of $50 million in 2019, which was later increased to $250 million in 2022 and now $600 million. 50% of the current $600 million corpus has already been disbursed, Sharma said. A key factor he cites is the government's investment in building India's digital infrastructure and the widespread availability of cheap data.

Giving a broad breakdown of the segments covered in the current round of funding commitments, a senior HSBC executive listed segments such as B2B commerce, consumer technology - used car platforms - fintech, direct-to-consumer, agritech, logistics, electric vehicles and others.

Talking about the funding freeze that the startup sector has gone through in the last eighteen months, Sharma said that HSBC's portfolio in the sector has not felt stressed, adding that the bank is not targeting equity funding but focusing on providing working capital. With HSBC's SME (small and medium enterprises) portfolio growing in the mid-to-high-teens, the bank aims to continue the growth trajectory of its tech start-up funding corpus given the macroeconomic environment.

“Our sweet spot with corporate India is when a company goes international. If it does cross-border imports and exports, it has FX requirements, and our transaction banking franchise is huge so we can focus on that,” he said.