Survey: Nearly 80% of HK startups agree AI automation is key to navigating financial challenges

Over 80% of startups in Hong Kong are expecting growth in their businesses in 2025, with over 70% agreeing that AI automation is an essential tool to navigate financial challenges, according to a survey by venture builder Inspect Element (IE).

Founded by a team of former early members from notable start-up unicorns such as Klook, Bowtie, and Eatigo, IE conducted a survey "re: inspect - Think 2025" involving nearly 100 startups, comprising companies with members primarily aged 25 to 45, developing businesses across sectors such as AI, tech (health, education, marketing, to reveal their strategies for growth despite economic headwinds.

The inaugural survey reveals strong, unexpected optimism among interviewed start-ups despite anticipated economic challenges. Amongst the 92 respondents, 82% anticipate growth in their businesses in 2025. Of these, 37% even expect their companies to double in size. However, 8% of companies interviewed indicated plans to reduce their teams by 25% to 50%.

“Throughout most of 2024, companies maintained a conservative approach to team expansion. However, since Q4 2024 through January 2025, we have observed increasing client demand for talent, particularly for sales and growth-related positions,” said Lawrence Chan, co-founder of an international recruitment start-up, NAHC (Not Another Headhunting Company).

“Roles requiring high-level decision-making remain based in Hong Kong, while companies tend to move back-office positions to lower-cost markets. However, some clients report that the actual cost savings aren't as substantial as salary comparisons might suggest. This is due to challenges with legal systems, communication barriers, management culture differences, work efficiency issues, and administrative complexities. As a result, these companies are reconsidering hiring for these positions in Hong Kong again,” he added.

"Despite the weak macro environment, we’ve seen steady growth in the education sector. In 2025, we will adopt a risk-controlled expansion mode, focusing on talent and team. This year, we plan to increase our headcount by 20-30%, with recruitment spread across Hong Kong and Shenzhen," said Sarah Tong, founder of Big Bang Academy. "Talent is crucial for scaling, and we plan to increase our headcount by 20-30% this year, focusing on both Hong Kong and Shenzhen to expand our talent pool."

Over half of the surveyed founders from startup businesses believe freelancers can drive and accelerate growth while maintaining flexibility in cash flows. Specifically, 62% highlighted the importance of hiring freelancers or venture builders, and 78% said AI automation as an essential tool to navigate financial challenges.

“Our productivity has significantly increased thanks to various AI tools, reducing the need for full-time involvement in many roles,” said Jessie Chan, the founder of a member-based online beauty media in Hong Kong. “By 2025, we plan to expand our part-time and freelance workforce. This approach enhances flexibility, accelerates onboarding, and allows us to quickly assess a candidate's cultural alignment and skill suitability for a role.”

Meanwhile, startup founders prioritise profitability (43%), sustainable growth (42%), and cash flow (27%). Many indicated that hiring freelancers or utilising venture builders during growth phases will be crucial for market expansion, strategic direction, partnerships, branding, and product diversification. This strategy not only drives growth but also maintains cash flow flexibility.

"The survey reveals that founders are eager to think big and expand globally. While they recognise the value of experienced talent, they often can't afford to hire full-time. Thus, freelancers and venture builders offer a cost-effective, flexible solution for business development. We call them the ‘powerful mercenaries’," said Vincent So, founder of IE.

The survey also uncovered insightful trends regarding funding sources. Of 36 respondents, over 60% aim for funding between US$100,000 and US$25 million, with Hong Kong (77%) and the United States (43%) as primary funding sources. Singapore follows with 40%, while the Greater Bay Area ranks fourth at 28%. Popular expansion destinations include Hong Kong, Singapore, Taiwan, Southeast Asia, and Japan.

“When I think about raising money, I want to target investors who can help accelerate customer acquisition and recruit key talents at the earliest stage of company building. So I will go to the place with the highest concentration of investors that can meet this goal,” said Chris Hugentobler, the co-founder of Ansel, a Hong Kong-born and currently US-based startup, who is also a co-founder at IE.

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