Validus Capital (Validus), Singapore’s leading SME financing platform, has successfully raised USD15.2 million (SGD20.5 million) in an oversubscribed Series B funding round.
Investment in Validus’ Series B round was led by FMO, Netherlands’ public-private development bank. FMO has over 300 investments in banking and financial services institutions (BFSIs). Its investment in Validus marked FMO’s first fintech investment in Southeast Asia, a region which saw over USD5.7 billion in fintech investments in 2017 according to KPMG. Participating investors also include Taiwan’s Cathay Financial Holdings, Singapore’s Openspace Ventures (previously NSI Ventures), Temasek investment arm Vertex Ventures, Thailand’s AddVentures by SCG and Vietnam’s VinaCapital Ventures.
Founded in 2015 in Singapore, Validus brings together accredited individual and institutional lenders and SMEs. It obtained its CMS license from MAS in December 2017. Since then, Validus has successfully topped USD133.1 million (SGD180 million) in business funding – a record for P2P business lending platforms in Singapore.
Ajit Raikar, Chief Executive Officer and Co-Founder, Validus Capital, says: “Southeast Asia is one of the fastest growing economic regions globally, where there is a clear need for alternative financing platforms such as Validus to complement the traditional banking and financial infrastructures. Having a strong team, technology and data science capabilities has allowed us to partner with strategic global investors for our next growth stage. This reaffirms that we are well on track to deliver on our strong growth forecasts, and our ambition to become a digital ‘bank-like’ fintech for underserved SMEs is well supported with two leading sovereign funds investing into Validus.”
According to Deloitte, SMEs contribute around 40 per cent of Southeast Asia’s gross domestic product (GDP) and employ 70 per cent of the region’s workforce. Despite the importance of SMEs regionally, support is generally lacking, particularly in terms of business financing. McKinsey Global Institute reported that 39 million Southeast Asian SMEs (or 51 per cent) lack access to credit. P2P Lending has emerged as a popular alternative financing option for SMEs in Southeast Asia to service this unmet business financing gap. Per EY, around 68 per cent of the region’s SMEs are receptive to tap into alternative financing options, including P2P Lending.
“Validus is particularly well-positioned to lead the P2P Lending industry’s change in Southeast Asia and spearhead financial inclusion among the unbanked and underserved businesses in the Region in a more digital way. Their planned expansion to Indonesia and Vietnam will strongly contribute to job creation by SMEs in these countries. We are excited to embark on this digital journey with Validus and their very strong shareholder base, as they continue on their steady and sustainable growth trajectory,” says Linda Broekhuizen, Chief Investment Officer, FMO.
With fresh funding, Validus is looking to invest heavily in technology innovation, particularly around artificial intelligence and machine learning to help make business financing even more convenient and safe for SMEs. It will also fund their Southeast Asia expansion, starting with Indonesia this year, followed by Vietnam.
Nikhilesh Goel Co-Founder and Chief Operating Officer at Validus Capital, says: “Our strategic approach in fundraising goes deep beyond the size of the investment. We look for partners who share our vision in driving inclusive growth in the region, who are able to offer the value-add and guidance needed. The strong partnerships we’ve built with our investors will not only help us to strengthen our technology and regional expansion but also provide the deep-seated connections and valuable advice across areas like business development, capital funding and recruitment, areas which are vital for the growth of the company.”
