Validus Capital raises US$15.16mil in Series B funding

• Round led by FMO, marking the Dutch bank’s first direct fintech investment in Asia
• Funding will drive technology and product development, expand geographic footprint

VALIDUS Capital, a Singapore-based SME financing platform, has raised US$15.16 (S$20.5 million; RM61.77 million) in an oversubscribed Series B funding round.

[US$1 = S$1.35; RM4.0734]

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. 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 topped S$180 million in business funding - a record for P2P business lending platforms in Singapore.

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 in 2Q19.

Validus Capital chief executive officer and co-founder Ajit Raikar, 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.”

“We are proud to be working with such reputed venture capital firms, including a number of repeat investors, who embrace our vision and goal of driving financial inclusion - to build better business communities in emerging markets and promote inclusive growth among the region’s SMEs. We are doing so by using AI and delivering easily accessible and affordable business finance to SMEs,” said Raikar. 

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 Southeast Asia to service this unmet business financing gap.

“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 FMO chief investment officer Linda Broekhuizen.

“Validus has been leading the way in helping Singapore's SMEs grow through the provision of convenient and accessible business financing. Their growth is the fastest among peer-to-peer lending platforms in Singapore, making them one of the more promising fintech leaders in Southeast Asia.

“Validus continues to build cluster communities through their unique Corporate Partnership model, delivering financial inclusion to the thousands of SME vendors as well as enabling small businesses to execute projects, grow their business and manpower with sustainable capital.

“We have confidence that they will replicate their Singapore successes across the region, becoming a true champion of financial inclusion among Southeast Asia's SMEs. We remain every bit as delighted to continue building on our partnership with them,” said Vertex Ventures SEA/ India managing partner Chua Kee Lock.