Lending to SMEs was a hot topic in Southeast Asia last year and companies are also attracting investors in 2019. The final capital to raise capital is Singapore-based Validus Capital which today announced $ 20.5 billion ($ 15.2 million) in regional expansion B series.
Founded in 2015, Validus focuses on growth capital of SMEs with an average loan of $ SGD 70,000 ($ 52,000) in Singapore. The P2P lending platform combines SMEs with private and institutional lenders and has provided loans of $ 180 million ($ 134 million) since the license was acquired in December 2017. Validus works with an insurance company to draw its loans.
The Company "Small and mid-sized companies, such as security or service companies that do not have collateral … or companies in the construction sector where cash flow becomes a problem as growth grows," Validus co-founder and CEO told TechCrunch , 1
According to Validos, Validos uses a cluster model that includes partnerships with procurement platforms. SMEs to the point where they need capital, for example, if they have received a large or large order.
This new financing round is led by the Dutch development bank FMO – the first direct investment in Asia is made through this deal – involving Taiwan's Cathay Financial Holdings, Vietnam's VinaCapital Ventures, Siam Cement Group's AddVentures in Thailand and VCs Openspace Ventures of Singapore and (returning supporters) vertex backed by State Fund Temasek. Previously, in 2017, the company had raised a Series A of $ 3 million.
Nahata, the Cooperating with co-founder and CEO Ajit Raikar, the company said it intends to expand into Indonesia in the second quarter and in Vietnam this year. In the Indonesian capital of Jakarta, the company already has a team of nearly 20 employees, which is likely to double as soon as the company receives the required license it is looking for.
The capital will also go towards technology development. These include the Valdius Credit Risk Algorithm and APIs for closer collaboration with third-party services, particularly in relation to the aggregation of data.
Nahata said that Validus usually requires so much data and signs of growth that applicants can provide. So that's information like invoices, contracts and cash flow signals. It also shows how companies work with large companies as endorsements.
However, in Southeast Asia, and especially outside of Singapore, credit is not a purely digital business. Having a retail presence, including partners with banks and offline points of sale, is absolutely necessary for growth. While he said that word of mouth is a key driver – while the 90 percent return rate is impressive – Nahata said a mix of online and offline is important.
"The last mile requires touch points, but our goal is that the origin of the case should be technology-oriented," he said.
Other medium-sized lenders in Southeast Asia include finance companies, Aspire Capital, First Circle and Finaxar.