Singapore fintech startup Validus raises US$15.2M in Series B funding

Validus Capital, a Singaporean peer-to-business (P2B) lending platform for small and medium-sized enterprises (SMEs), has announced the raise of US$15.2 million (S$20.5 million) in its Series B funding round.

Investment in the startup’s Series B round was led by FMO, Netherlands’ public-private development bank.

FMO has over 300 investments in banking and financial services institutions, however this is its first direct investment in Southeast Asia, a region which saw over US$5.7 billion in fintech investments in 2017, according to KPMG.

“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,” said Ajit Raikar, Chief Executive Officer and co-founder of Validus.

“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,” he added.

Other investors in the venture also include Taiwan’s Cathay Financial Holdings, Singapore’s Openspace Ventures, Vertex Ventures (Temasek’s investment arm), 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 Capital Markets Services (CMS) licence from the Monetary Authority of Singapore (MAS) in December 2017. Since then, Validus has successfully topped S$180 million in business funding – a record for P2P business lending platforms in Singapore.

According to Deloitte, SMEs contribute around 40% of Southeast Asia’s gross domestic product (GDP) and employ 70% of the region’s workforce. However, despite of these figure, support to SMEs is generally low, particularly in terms of business financing.

McKinsey Global Institute reported that 39 million Southeast Asian SMEs (or 51%) lack access to credit. P2P lending has emerged as a popular alternative financing option for SMEs in the region to service this unmet business financing gap.

EY says that around 68% of the region’s SMEs are receptive to tap into alternative financing options, including P2P lending.