MTR Lab shares investment approach, focus for rest of 2023

MTR Lab is on the lookout for sustainability and technology innovators, especially in mobility and construction,as it seeks to execute Hong Kong's vision of building a smart city.

“When we look for potential partners to collaborate with and invest in, we target companies from early-to-growth stage and are typically interested in Series A and Series B investment opportunities to bring our resources, expertise and funding to the project to explore further solutions,” Michael Chan, managing director of MTR Lab, told AsianInvestor.

These are companies that already have a proven track record, product-market fit, high growth trajectory, and can generate synergies for the MTR ecosystem as it aims to create strategic value through investment, he said.

MTR Lab is a wholly owned investment entity of MTR Corporation, Hong Kong’s railways operator.

Chan was appointed to the role in October 2022.

TECH, SUSTAINABILITY FOCUS

The entity invests in technology and solutions with a focus on innovation and sustainability.

There is also a focus on trying to match the technologies it invests in to MTR’s business units where these technologies may apply. 

“We provide support for our portfolio companies, leveraging the expertise of our parent company MTR, such as helping them explore new use cases within MTR, while creating real value and practical synergies for MTR and the broader community,” he said.

Chan said he sees high potenial for smart techologies in certain specific sectors.

“We have seen promising growth in the mobility and construction industries in Hong Kong and mainland China. For the remainder of 2023, we expect to focus on investing in effective solutions in mobility, property technology, and construction technology that bring the desired results,” he said.

In mobility, the asset owner is looking at railway technology, MaaS or mobility-as-a service, and new mobility modes.

“We also see great potential in technologies that are digitalising the construction processes,” said Chan.

COLLABORATION PARTNERS

MTR Lab identifies investment opportunities via various channels.

It has a close working relationship with partners such as Hong Kong Science and Technology Park and tech hub Cyberport, as well as collaborates with higher education and research institutions such as the Hong Kong University of Science and Technology, said Chan.

“Our philosophy, simply put is that ‘1 + 1 is greater than 2’ i.e., co-creating with the right partners helps maximise the outcomes… at MTR Lab, we are always seeking out global opportunities. Our most recent investment examples include alfred24 and Ampd Energy, both of which have a strong presence in overseas markets,” he said.

MTR Lab in June invested in local start-up Ampd Energy, a local battery-powered energy storage system provider, to fund the company’s expansion projects in the United Arab Emirates and United States. Ampd Energy bagged $8 million in funding from MTR Lab and venture capital firms 2150 and Taronga Ventures.

MTR Lab in April also invested in logistics technology start-up alfred24, the first investment target of a collaboration between MTR Lab and Cyberport.

alfred24 specialises in automated parcel lockers and offers software solutions for locker operators.

It plans to use the funds to invest in battery and solar-powered Bluetooth lockers to reduce carbon emissions related to last-mile delivery by 70%.

"Traditional e-commerce logistics requires the equivalent of 17 carbon dioxide-emitting vans per 1,000 deliveries, while alfred24 requires the equivalent of just four," Christian Secci, co-founder and CEO of alfred24, said in a statement at the time.

alfred24 was MTR Lab's first investment target under a collaboration with Cyberport.
Image credit: MTR Lab

STARTUP INCUBATOR

MTR Lab also incubates startups that are focused on sustainability and helping the development of smart cities.

Its platform, Co+Lab, launched in December 2022, invites start-ups and entrepreneurs to pitch us their business ideas and solutions through personal submissions.

It also has its own subsidiaries.

“For example, Carbon Wallet, one of MTR Lab’s subsidiaries, is a one-stop carbon reduction reward platform in Hong Kong dedicated to promoting sustainability and low-carbon living through rewarding the public for their green actions in daily lives," said Chan.

Another subsidiary of MTR Lab, Urban Access Solutions (UAS), provides access control solutions leveraging the use of Octopus Cards, and is currently developing smart parking solutions, he said.

Chan said the investment focus is centred on two overarching themes – smart city and sustainability, and that "we are interested in companies that operate and innovate across verticals encompassing mobility, retail, property, and financial and data services."

Hong Kong’s government issued a smart city blueprint in December 2017, laying out 76 initiatives under six areas – smart mobility, smart living, smart environment, smart people, smart government and smart economy.

Blueprint 2.0 was published in December 2022 with over 130 initiatives covering digital infrastructure including smart village pilots and a traffic data analytics system.

The story has been updated with Chan's appointment date.