🤯 $70M Burned. No Profits. HSBC Gave Up.

Serai had everything — capital, connections, and 16k users... but still died broke. Here’s why Serai failed — and what every founder should learn.

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Hey Founders,

Welcome to The Runway Ventures — a weekly newsletter where I deep dive into failed startup stories to help you become the top 1% founder by learning from their mistakes with actionable insights.

Today’s story is about how Serai (another HSBC’s corporate venture) failed despite having everything (capital, connections, and 16k users). Let’s get to it! 🚀

Today at a Glance:

  • ☠️ 1 Failed Startup → Serai

  • ⚠️ 2 Mistakes → Confusing users with paying customers

  • 🧠 3 Lessons Learned → Users ≠ Customers

  • 🔗 The Runway Insights → How to instantly sound more sincere

  • 💰 Southeast Asia Funding Radar → Chocolate Finance raises $15M (Series A) for product development and company’s expansion

☠️ 1 Failed Startup: Serai

🚀 The Rise of Serai

🇭🇰 Launched by banking giant HSBC in 2019, Serai was a Hong Kong–based B2B digital platform aimed at connecting small and mid-sized apparel manufacturers with suppliers all over the world.

If Facebook is for your personal network and LinkedIn for your professional network, Serai is for your company.

shared by Serai in its statement
  • The Problem — 👕 In the apparel industry, global supply chains are super fragmented and it’s hard for smaller businesses to find reliable partners.

    • For example, a tiny fashion brand in Bangladesh might struggle to connect with a fabric supplier in China, or a garment factory might not know how to reach new international buyers.

  • The Solution — 🤝🏻 Serai provided an online network where companies in the clothing and textiles sector could easily search, find and connect with each other through verified networks. Not just that, Serai also offered:

    • Trade financing (small loans) to help fund deals

    • Tools for supply-chain transparency to track products and materials

    • ESG (environmental, social, governance) traceability to see things like where the cotton in a T-shirt came from

🌍 In short, Serai wanted to make global trade easier and more transparent for the little guys in the apparel industry.

🤔 So, who were the people behind Serai? 

The venture actually started as an idea within HSBC in 2017. A veteran HSBC banker named Vivek Ramachandran – then head of growth and innovation — pitched the concept of an online platform for B2B.

He had support from a top executive (Noel Quinn, who later became HSBC’s CEO) who sponsored the idea, and “Jasmine22” was born as the project’s code.

Ramachandran pulled in a handful of colleagues from HSBC to build the new venture — for example, Khuresh Faizullabhoy came on as Serai’s chief product officer and Andrew Dennison as COO.

With HSBC funding and resources (the kind most startups could only dream of), Serai officially launched in Hong Kong in June 2019.

Ramachandran? He became the CEO (essentially the “founder” of this HSBC-backed startup).

Serai CEO

🔥 By 2021, Serai had attracted over 16,000 companies from more than 110 countries. India became their largest market, with over 7,000 Indian companies joining the platform – that's nearly half their user base.

The platform was seeing 98% quarter-over-quarter growth in company sign-ups.

🏭 In 2021, Serai launched a Traceability solution that allowed global apparel brands and manufacturers to trace and map their supply chain from raw material to finished product. This was huge — especially as sustainability and supply chain transparency were becoming must-haves rather than nice-to-haves.

Serai also teamed up with Coface to bring credit risk management tools to their platform.

🚀 Since Serai was free to join, major garment-producing regions like India, Bangladesh, and Sri Lanka were joining in to be more visible to international buyers.

A huge user base.

Big name partners.

Fully backed by HSBC (one of the world’s largest banks).

Life was good…

📉 The Fall of Serai

But that high point didn’t last.

💸 Apparently, HSBC had poured ~$70 million over 3 years, but the investment didn’t turn into revenue as Serai struggled to get enough paying customers (yes, despite having 16,000 companies onboarded as users).

HSBC, the big boss, was getting a bit impatient…

📌 Here’s what happened to Serai:

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.

shared by Serai in its statement

😎 Let’s get as many users as possible

  • 2017🔔 HSBC’s leadership kicked off an internal innovation initiative.

    • Vivek Ramachandran pitched the idea for a new B2B trading platform, which won support from executive Noel Quinn.

    • The project (code-named “Jasmine22”) was green-lit as a way to connect buyers and sellers.

  • 2019

    • Jun — Serai officially launched in Hong Kong as a wholly-owned HSBC startup. Vivek Ramachandran served as CEO, backed by a team of HSBC veterans.

    • Late🤬 Only a few months post-launch, Hong Kong was hit by political protests and unrest. This turmoil dealt an early blow to the business environment and complicated Serai’s initial operations.

  • 2020

    • Early🦠 Suddenly, the COVID-19 pandemic erupted globally, disrupting supply chains and stalling trade. Serai’s original plan to offer lending to Hong Kong SMEs was derailed as local business activity slowed dramatically (and many businesses died).

    • Mid🧐 Serai pivoted to focus on the apparel industry.

      • It partnered with Coats Digital and Res.Q to provide real-time production data and supply chain transparency for garment manufacturers, addressing urgent needs as factories and buyers adjust to remote work.

    • Late — 🌏 Expanded its footprint in Asia.

      • Opened a tech development hub in Shanghai, and by year’s end the team grew to ~100 employees (though the venture still wasn’t profitable).

      • Around the same time, Serai partnered with Coface, a trade credit insurer, to integrate credit risk management tools into the platform, helping users vet partners and insure their trade.

  • 2021

    • Jan — 🏄🏻‍♂️ Riding the wave of sustainability concerns, Serai piloted a new ESG traceability solution.

      • This pilot let apparel companies trace raw materials (like cotton) in their supply chain, catering to the growing demand for transparency and ethical sourcing in fashion.

    • Aug — 🏔️ Serai hit a peak in user growth with 16,000 companies from more than 110 countries.

🥵 When HSBC decided to pull the plug (game over, kids)

  • May 2022🚨 After investing ~$70 million with minimal revenue (Serai was still losing money), HSBC put Serai “under review” due to financial concerns.

    • CEO Vivek Ramachandran resigned and returned to a role at HSBC, and COO Andrew Dennison assumed leadership of Serai.

    • The startup’s operations were essentially paused as the team explored last-ditch options.

  • Jun 2022 — 👋🏻 Finally, HSBC officially pulled the plug on Serai, citing the closure as a “purely commercial decision”.

    • Serai notified users that it would wind down all operations, with the platform and network shutting down on 25 June 2022.

    • The corporate venture was officially closed after 3 years, citing the inability to build a commercially viable business model despite the team’s significant efforts.

Serai was a well funded startup that had every advantage on paper — ample capital, a ready customer base from HSBC’s network, and a timely problem to solve — yet ultimately couldn’t make the economics work.

And just like that, when Serai failed to become “commercially viable”, HSBC abandoned its child and moved on (Zing, another HSBC’s corporate venture, was also recently shut down after losing $150M).

So what does that mean?

🙏🏻 If you can’t find a sustainable business model, no amount of hype or resources can keep the lights on.

Lastly, don’t confuse users with customers. You can have 10 million users and still be broke if you're losing money.

What’s your thought on corporate ventures?

Want to learn more about Serai’s downfall?

⚠️ 2 Mistakes

Mistake 1: Confusing users with paying customers

Serai pulled in 16,000 companies from 110+ countries. But… nearly all were freeloading. Turns out, most of Serai’s “users” weren’t paying customers at all.

🤑 You can have a packed party, but if nobody’s buying drinks, the bar still goes bust.

🚨 Why free users killed Serai:

  • False Positive Signals: 16,000 signups tricked them into thinking PMF was achieved. In reality, users probably came for HSBC’s brand — not Serai’s value.

  • Unit Economics Disaster: Each free user cost Serai $$$ in support/tech. With no path to profitability, HSBC called it: "Not commercially viable".

Mistake 2: Corporate Venture Complacency: Money ≠ Product-Market Fit

Backed by a giant like HSBC, Serai was flush with cash (~$70M!) and a global network.

🧙🏻 Serai’s fat budget became their curse in disguise because it removed the urgency to monetise (Why rush when they had an unlimited credit card?). And Serai prioritise user-growth over path to profitability.

When macro shocks hit (HK protests, Covid) and growth stalled, the bank demanded returns — fast. With no clear path to profit, the venture was quietly euthanised in June 2022.

🧠 3 Lessons Learned

Lesson 1: Users ≠ Customers

Serai signed up thousands (especially after making it free!), but didn’t establish a path to recurring revenue.

16,000 users are great. You know what’s even better?

16,000 paying customers. That’s right.

🌮 Key Takeaways:
  • 🤑 Monetise from Day 1

    • Solve one expensive headache, charge for it early, and scale after you see customers happily paying.

    • If people only sign up because it’s free, you won’t survive. Charge earlier, even on a tiny scale — then adjust, learn, and iterate.

    • When Stripe and Plaid entered fintech, they charged from day 1 (even as beta tools). That forced them to build things customers truly needed — and to kill features that didn’t add real value.

  • 📍 Use pricing as positioning

    • Free often signals “low value.”

    • A premium price (with a free trial) tells people: this is serious infrastructure, not just another free tool.

    • For example, Alibaba charges manufacturers $1,399/year to become a “Gold Supplier” and get buyer visibility.

    • Foursource charges premium buyers for extra access to verified suppliers.

    • Both validated their pricing early — and built up from there.

Lesson 2: Only product market fit can save you (not corporate backing)

Make something people want.

— shared by Paul Graham (YC)

Corporate ventures often fall into this trap:

  • They assume capital = advantage

  • They think access to customers = adoption

  • They assume "innovating inside a bank" = market fit

But here’s the harsh truth:

No amount of funding, brand equity, or headcount can fake PMF.

And in the end, even a giant like HSBC couldn’t save a product that the market didn’t deeply, urgently need.

🌮 Key Takeaways:
  • 🫡 Design your “must-have” ASAP

    • What is the one thing your customer must do in your product that proves it delivers value?

    • Interview your active users and ask: “If this product disappeared tomorrow, what would you do?”

    • Identify what feature or outcome keeps them coming back.

    • Build your onboarding around hitting that moment (time-to-value) fast.

  • 🙏🏻 Track retention like your company depends on it (because it does)

    • Set retention checkpoints (Day 1, Day 7, Day 30).

    • Build dashboards that show: “Of every 100 new users, how many return each week?”

    • Double down on what’s sticky. Kill what’s not.

Lesson 3: Don’t build for everyone

When you try to serve everyone, you end up serving no one well.

Serai launched as an SME lender (2019), pivoted to apparel networking (2020), then chased ESG traceability (2021). Each pivot responded to crises (COVID, protests) or trends (sustainability), but no core monetisable product ever stuck.

At some point, the platform became a Swiss army knife — but nobody knew which blade to use first.

Result?

Everyone used it a little.
No one used it deeply.
And no one paid.

🌮 Key Takeaways:
  • 🎯 Choose an ICP early (and go all in)

    • Ask yourself:

      • Who has the most painful problem right now?

      • Who has the biggest urgency + budget + decision power?

    • Then:

      • Build your roadmap and product for them.

      • Build pricing, onboarding, support — all for them.

  • 🙅🏻‍♂️ Create a “Who We’re Not For” list

    • Clarity isn’t just about who you serve. It’s also about who you don’t.

    • Once you know who you don’t serve:

      • It’s much easier to say no.

      • It’s much easier to focus.

      • Clarity = Focus = Superpower

🔗 The Runway Insights

  • Wes Kao: How to instantly sound more sincere (Link)

  • How to write content that ranks with LLMs (Link)

  • How to stop your revenue leakage (Link)

  • This email strategy changed everything (Link)

  • McKinsey Report: The 13 tech trends in 2025 (Link)

💰 Southeast Asia Funding Radar

  • Chocolate Finance raises $15M (Series A) for product development and company’s expansion (Link)

  • Respiree closes $11.6M (Series A) to expand their AI solutions to new markets (Link)

  • Bang Jamin raises $4M (Pre-Series A) to expand platform capabilities and distribution (Link)

  • EatClub raises $22M to expand its cloud kitchen model (Link)

🤝🏻 Before you go: Here are 2 ways I can help you

  1. Founder Office Hours: Book a 1-1 call with me, share your problems and questions, and I'll help you cut through the noise, avoid costly mistakes, and get clear next steps that actually work. I help early-stage founders with:

    • Validating ideas & building MVPs

    • Tech & product development

    • GTM strategy & fundraising

    • Finding PMF & growth hacks

    • Growing & monetising newsletters

    • Attract customers & investors by building a solid founder brand on LinkedIn

  2. Promote your business to 18,000+ founders: Acquire high-value leads and customers for your business by getting your brand in front of highly engaged startup founders and operators in Asia.

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That’s all for today

Thanks for reading. I hope you enjoyed today's issue. More than that, I hope you’ve learned some actionable tips to build and grow your business.

You can always write to me by simply replying to this newsletter and we can chat.

See you again next week.

- Admond

Disclaimer: The Runway Ventures content is for informational purposes only. Unless otherwise stated, any opinions expressed above belong solely to the author.

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