Validus Capital, a Singapore-based peer-to-business (P2B) financing platform for small and medium enterprises, closed a S$20.5 million (US$15 million) Series B financing round which was led by FMO, a Dutch public-private development bank.
Other investors include Temasek’s investment arm Vertex Ventures, which had also participated in previous rounds; Taiwan’s Cathay Financial Holdings, and Vietnam’s VinaCapital Ventures.
The cash will be utilized to fund its Southeast Asia expansion, beginning with Indonesia and then Vietnam by end-2019. Validus pledges to invest heavily into artificial intelligence and machine learning to better existing systems. Risk assessment and fraud prevention are some of the key issues that need to be solved in Southeast Asia’s online lending space.
The company claims to be the top SME lending platform in Singapore, although it’s up against at least one strong competitor, the Sequoia-backed Funding Societies which operates in Singapore, Indonesia, and Malaysia and raised US$25 million in its series B round.
Validus has been operating for four years and says it saw the number of loans issued jumped exponentially by 260% year-on-year to close to 2,000 within the year. In terms of volume, it grew by 350%.
The firm’s co-founder and CEO Ajit Raikar told KrASIA that he believes in the importance of “mining deep “first in order to stabilize one’s business before looking at expansion. Validus Capital is now ready to go regional, Raikar said. For 2019, the focus will be on three markets – Singapore, Indonesia, and Vietnam.
In Southeast Asia, SMEs make up 70% of the region’s workforce and they contribute to around 40% of the region’s economy, according to a Deloitte report. Yet, 51% of SMEs lack access to credit which means many struggle to survive when working capital availability hits a bottleneck.
Editor: Nadine Freischlad