A Hong Kong-based trade platform launched by HSBC Holdings three years ago with much fanfare has shut down after failing to build a commercially viable business.

Serai, a wholly-owned subsidiary of Europe's biggest bank, that connected small-and-medium-sized apparel makers with component suppliers worldwide, was HSBC's first investment in a non-banking tech startup.

HSBC had invested around $70 million in the independently operating 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.

"The decision to wind down Serai follows a thorough business review and is a purely commercial decision," HSBC said in a statement to Reuters on Wednesday. It did not provide details about Serai's business or investment in the company.

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.

Serai also confirmed its closure in a notice on its website and said its services would not be available from June 25.

"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.

One of the sources said the company was unable to attract enough paying customers, though it had signed up many firms based in India, Bangladesh, Sri Lanka, Hong Kong and elsewhere.

Serai employed about 100 staff, mostly in Hong Kong. Some of the employees are joining HSBC and some were laid off with severance packages, the sources said.

Serai's initial business plan included disbursing small loans to Hong Kong-based firms to finance their purchases but that was impacted during the hit to business activity in Hong Kong and then the global pandemic.

Its platform connected buyers and sellers in the highly fragmented clothing and garments industry.

Sheng Lu, an associate professor in the department of fashion and apparel studies at the University of Delaware, said while there was demand for such technology, it needed "substantial capital investment and profound technical knowledge" about the industry and regulations.

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.

(Reporting by Selena Li and Anshuman Daga; Editing by Sumeet Chatterjee, Jason Neely, Jane Merriman and Sam Holmes)