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

March 06, 2019 - 02:04
P2P Lending Platform Validus Capital Raises Over S$20 Million to Boost SME Growth in Southeast Asia

SINGAPORE Media OutReach - 6 March 2019 - ValidusCapital (Validus), Singapore's leading SME financingplatform, has successfully raised US$15.2 million (S$20.5 million) in anoversubscribed 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 inbanking and financial services institutions (BFSIs). Its investment in Validusmarked FMO's first fintech investment in Southeast Asia, a region which sawover US$5.7 billion infintech investments in 2017 according to KPMG. Participating investors alsoinclude Taiwan's Cathay Financial Holdings, Singapore's Openspace Ventures(previously NSI Ventures), Temasek investment arm Vertex Ventures, Thailand'sAddVentures by SCG and Vietnam's VinaCapital Ventures.


Founded in 2015 in Singapore, Validus brings together accreditedindividual and institutional lenders and SMEs. It obtained its CMS license fromMAS in December 2017. Since then, Validus has successfully topped US$133.1million (S$180 million) in business funding - a record for P2P business lendingplatforms in Singapore.


Ajit Raikar, Chief Executive Officer and Co-Founder, Validus Capitalexpressed his confidence in the company's future and talks about the strongglobal interest in Validus' Series B fundraising, "Southeast Asia is one of thefastest growing economic regions globally, where there is a clear need foralternative financing platforms such as Validus to complement the traditionalbanking and financial infrastructures. Having a strong team, technology anddata science capabilities has allowed us to partner with strategic globalinvestors for our next growth stage. This reaffirms that we are well on trackto 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 sovereignfunds investing into Validus."


According to Deloitte, SMEs contribute around 40per cent of Southeast Asia's gross domestic product (GDP) and employ 70 percent of the region's workforce. Despite the importance of SMEs regionally,support is generally lacking, particularly in terms of business financing. McKinsey Global Institute reportedthat 39 million Southeast Asian SMEs (or 51 per cent) lack access to credit. P2PLending has emerged as a popular alternative financing option for SMEs inSoutheast Asia to service this unmet business financing gap. Per EY, around 68 per cent of theregion's SMEs are receptive to tap into alternative financing options,including P2P Lending.


"Validus is particularly well-positioned to lead the P2P Lendingindustry's change in Southeast Asia and spearhead financial inclusion among theunbanked and underserved businesses in the Region in a more digital way. Theirplanned expansion to Indonesia and Vietnam will strongly contribute to jobcreation by SMEs in these countries. We are excited to embark on this digital journeywith Validus and their very strong shareholder base, as they continue on theirsteady and sustainable growth trajectory," said Linda Broekhuizen, ChiefInvestment Officer, FMO.


With fresh funding, Validusis looking to invest heavily in technology innovation, particularly aroundartificial intelligence and machine learning to help make business financingeven more convenient and safe for SMEs. It will also fund their Southeast Asiaexpansion, starting with Indonesia this year, followed by Vietnam.


Nikhilesh Goel Co-Founderand Chief Operating Officer at Validus Capital, whose background is in privateequity shared, "Ourstrategic approach in fundraising goes deep beyond the size of the investment.We look for partners who share our vision in driving inclusive growth in theregion, who are able to offer the value-add and guidance needed. The strongpartnerships we've built with our investors will not only help us to strengthenour technology and regional expansion but also provide the deep-seated connections and valuable advice across areas like businessdevelopment, capital funding and recruitment, areas which are vital for thegrowth of the company."  


Over the past year, Validus has enjoyed atremendous series of successes where it has become Singapore's top SME P2P Lendingplatform. Two new products were introduced, namely Working Capital Financingand Purchase Order Financing. It experienced exponential growth in terms ofloans where almost 2,000 loans were disbursed in 2018, representing a 260 percent increase year-on-year (y-o-y) while disbursement volume increased 350 percent y-o-y. Overall, over 300,000 Singaporeans were directly and indirectlypositively impacted with the Validus platform and their growth numbers forecasta direct impact to the country's gross domestic product. Manned by anexperienced SME lending team that looks beyond financial data, into behaviouralpatterns, Validus continues to be a beacon of support to growing SMEs across SoutheastAsia. 

About Validus Capital

Founded in 2015 and backed by Netherlands' development bank FMO, aswell as Temasek Holdings' Vertex Ventures, Validus Capital is Singapore'sleading peer-to-business lending platform. Validus connects growing SMEs toaccredited investors and financial institutions. It acts as a catalyst ofsustainable growth for SMEs.


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


Licensed by the Monetary Authority of Singapore (MAS), Validus isalso a member of the Singapore Fintech Association. Please visit www.validus.sgfor 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