Singapore SME financing platform gets $20m

Vertex Growth is a fund focused on growth-stage opportunities managed by Vertex Ventures, the VC arm of Temasek Holdings. Orion Fund is a fund managed by K3 Venture Partners, the family office associated with Hong Kong’s Kuok Group.

Existing investors including Dutch development finance institution FMO, Vertex Ventures’ Southeast Asia and India-focused fund, Openspace Ventures, and VinaCapital Ventures also contributed.

Founded in 2015, Validus offers a financing platform that has obtained regulatory approval for operations in Singapore, Vietnam and Indonesia. It says that it has financed over $315 million across 15,000 loans to support underfunded small and medium businesses.

The company connects SMEs to capital from both institutional investors and individuals, who make their investment decisions on a peer-to-peer lending platform. Last year, it expanded its operations to Malaysia and Vietnam with corporate partners to introduce supply chain financing solutions to their SME ecosystems, and it plans to begin operations in Thailand later in the year.

Institutional investors and individuals seeking to lend to businesses need to meet a minimum portfolio size of S$50,000 ($35,274). They can invest to support working capital, invoice financing or the purchase financing needs of small businesses. Validus charges a 20% fee for returns with the money held in escrow by Hong Kong-base corporate services provider Vistra. Validus claims that investors earn above-average returns in comparison with other investment channels. 

"We are highly impressed by the leadership and depth of credit management experience at Validus. The team has demonstrated the unique ability to capture critical data points, combined with comprehensive machine learning capabilities, to identify high-potential SMEs that may have fallen through the gaps of the traditional banking model," said Meng Xiong Kuok, a managing partner at K3 Ventures, in a statement.

Apart from banks - the traditional channel for SME financing in the region - several other VC-backed fintech companies are also looking to service this space in Southeast Asia. However, these companies, including Koinworks, Funding Societies, Julo and FinAccel, offer digital lending solutions to individual consumers and businesses alike.

Singapore-based ride-hailing and online-to-offline services platform Grab also declared an ambition to offer lending, insurance, and wealth management products after it raised $856 million from Japanese investors earlier in the year. These services would all be deliverable through digital channels, for both individual consumers and SMEs.

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• Topics
• Southeast Asia
• Early-stage
• Technology
• Singapore
• Thailand
• Vietnam
• Malaysia
• Indonesia
• Fintech