P2P Lending Platform Validus Capital Raises Over S$20 Million to Boost SME Growth in Southeast Asia

SINGAPORE -�Media OutReach - 6 March 2019 – Validus
Capital (Validus), Singapore’s leading SME financing
platform, has successfully raised US$15.2 million (S$20.5 million) in an
oversubscribed Series B funding round.

 

Validus Co-founders (from left) Vikas Nahata, Ajit Raikar, Nikhilesh Goel

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 US$5.7 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 US$133.1
million (S$180 million) in business funding – a record for P2P business lending
platforms in Singapore.

 

Ajit Raikar, Chief Executive Officer and Co-Founder, Validus Capital
expressed his confidence in the company’s future and talks about the strong
global interest in Validus’ Series B fundraising, “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,” said 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, whose background is in private
equity shared, “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.”  

 

Over the past year, Validus has enjoyed a
tremendous series of successes where it has become Singapore’s top SME P2P Lending
platform. Two new products were introduced, namely Working Capital Financing
and Purchase Order Financing. It experienced exponential growth in terms of
loans where almost 2,000 loans were disbursed in 2018, representing a 260 per
cent increase year-on-year (y-o-y) while disbursement volume increased 350 per
cent y-o-y. Overall, over 300,000 Singaporeans were directly and indirectly
positively impacted with the Validus platform and their growth numbers forecast
a direct impact to the country’s gross domestic product. Manned by an
experienced SME lending team that looks beyond financial data, into behavioural
patterns, Validus continues to be a beacon of support to growing SMEs across Southeast
Asia. 

About Validus Capital

Founded in 2015 and backed by Netherlands’ development bank FMO, as
well as Temasek Holdings’ Vertex Ventures, Validus Capital is Singapore’s
leading peer-to-business lending platform. Validus connects growing SMEs to
accredited investors and financial institutions. It acts as a catalyst of
sustainable growth for SMEs.

 

Validus’ online marketplace is powered by a proprietary platform
which leverages a secure and robust cloud infrastructure as a delivery
mechanism. In addition, Validus utilises a robust risk algorithm that leverages
on artificial intelligence and machine learning to make more informed and
responsible lending decisions. Validus is also the first platform in the Region
to offer insurance cover for lenders (up to 90 per cent capital principal protection
for most invoice financing facilities). Its data-driven, collaborative approach
to business lending has helped it to forge strong industry partnerships with
many established brands. One such partnership with Visa launched a virtual
card-based solution to help SMEs scale their business. A key differentiator for
the company is its ability to lend at bank-like rates due to its institutional
lenders, which include family offices and funds.

 

Licensed by the Monetary Authority of Singapore (MAS), Validus is
also a member of the Singapore Fintech Association. Please visit www.validus.sg
for more details.

About FMO

FMO is the Dutch development bank. FMO has invested in the private sector in developing countries and emerging markets for more than 45 years. Its mission is to empower entrepreneurs to build a better world. FMO invest in sectors where it believes its contribution has the highest long-term impact: financial institutions, energy, and agribusiness. With an investment portfolio of €9.2 billion  (S$14.2 billion) spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally. Visit www.fmo.nl