Singapore-based Validus Capital announced during the week that it has so provided more than S$120 million (about US$87.5 million) in funding to date to Singapore small and medium-sized enterprises (SME) and other businesses.
The company said it has financed more than 1,600 loans, each of which was approved within 24 hours of application. The average amount funded per request was S$70,000 (US$51,000), with a high degree of diversification across various industry classes.
Validus, in a September 11 press release, said the company had been growing even as Singapore SMEs have been facing a S$20 billion (US$14.6 billion) funding gap.
“We are immensely proud to have helped accelerate the growth of so many of Singapore’s SMEs, and yet we still have much work to do to empower many more such businesses”, said Validus chief executive officer and co-founder, Ajit Raikar.
“We have innovations in the pipeline that will give SMEs even more capital flexibility and choice to suit their business strategies, aiming Validus towards our billion-dollar financing milestone by mid-2020.”
Established in 2015, Validus Capital said it has become Singapore’s leading peer-to-business lending platform, connecting growing SMEs to accredited investors and financial institutions and acting “as a catalyst of sustainable growth for SMEs.”
The company said it combines extensive experience in SME financing with a smart, data-driven approach, acting as a peer-to-business lending marketplace that reduces financial intermediation costs — the benefits of which are passed to both borrowers and investors.
Thus, Validus said, borrowers may have quicker approval times, faster access to capital for business expansion, while simultaneously allowing for less stringent requirements to small businesses that have conventionally faced financing difficulties because of a lack of collateral or cash flow records.
Validus Capital’s online marketplace is powered by a proprietary platform, and it leverages a secure and robust cloud infrastructure as a delivery mechanism. In addition, Validus said it utilises a robust risk algorithm that was developed in partnership with the Credit Research Initiative (CRI) team of the National University of Singapore’s Risk Management Institute (NUS-RMI).
AI & machine learning provide better lending decisions
Validus said it uses artificial intelligence (AI) and machine learning to make more informed and responsible lending decisions, and said it is also the first platform in the region to offer insurance cover for lenders: up to 90 per cent capital 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. 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.
From the start, Validus has been backed by Temasek Holdings‘ Vertex Ventures. “As a lead investor and primary partner when Validus first started out, Vertex has been able to see first-hand how it has positively impacted SMEs to accelerate their growth and capabilities,” said Vertex Ventures CEO Kee Lock Chua.
“While investment returns are important, what we value the most are companies that solve challenges and have societal impact — that’s exactly what Validus is doing.”
Validus has worked with various partners and last year launched a virtual card-based way to facilitate immediate and efficient cash flows by entities such as Visa inc., EQ Insurance, and National University of Singapore (NUS) to create a better marketplace lending ecosystem for its investors and borrowers.
“Working with key banks in Southeast Asia, Visa and Validus are two driving innovation in lending to the small business community,” said Vikram Kshettry, head of Visa’s business-to-business partnerships division in the Asia-Pacific region.
Virtual card-based facility spurs Singapore SMEs growth
“Electronic payments bring small businesses greater efficiency, supporting them in capitalising on opportunities quickly and accelerating their growth.
“The Validus and Visa partnership is also delivering solutions that make it easier for banks and their small business customers to access and use a range of data, providing them with new insights”, he added.
One year ago Validus commenced forging partnerships with corporations, including ST Engineering and SMRT, to fund their vendor base on a pre-approved basis. The company deepened its partnership with Visa to provide Singapore SMEs a virtual credit card-based solution to help them reinvest their profits into business growth.
Validus went on to close a S$4 million (US$1.5 million) Series A round from Vertex Ventures before partnering with Lighthouse Canton Group to launch a S$20 million (US$14.6 million) LCV Trade Finance Fund dedicated to financing Singapore SMEs. The latter fund is to be scaled up to S$200 million (US$145.8 million).
Feature photo: The_EDGE_SG
- Validus Boosts SME Lending, Helps Meet Rising Appetite For Growth Capital (Samachar Live)
- P2B lender Validus Capital raises over S$100m in funding for SMEs (The Business Times)
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