Validus, a Singapore-based digital lending platform targeting SMEs, has secured US$50 million in debt financing from HSBC under its ASEAN Growth Fund strategy.
Validus will use the proceeds to support financial inclusion for Indonesian micro, small and medium-sized enterprises (MSMEs), addressing the challenges they face in accessing financial resources.
According to the Indonesian Ministry of Economy, 64.2 million SMEs contribute 61% of Indonesia’s GDP, giving them enormous growth potential. These SMEs employ approximately 119.6 million people, or 97% of the country’s total workforce. However, only about 17.5 million SME players have entered the online ecosystem and e-commerce. According to a 2017 report by the World Bank, Indonesian SMEs face significant challenges in accessing financing, mainly due to stringent operational, reporting, and collateral requirements of commercial banks. According to the World Bank report, despite government initiatives, only about 20% of bank loans are extended to SMEs.
Vikas Nahata (Chairman) and Nihkilesh Goel (CEO) co-founded the business in Singapore in 2015. They developed a supply chain-centric lending model leveraging non-traditional data access in partnership with traditional banks and international institutions. The company has since expanded to Indonesia (Batumbu), Thailand (Siam Validus) and Vietnam (Validus Vietnam).
“Traditional banks in the SEA region still rely on legacy credit assessment methods for SMEs, relying too heavily on historical financial information and real estate collateral,” said Goel. “In a region with an annual GDP growth rate of 5-6%, SMEs need access to stable and accessible working capital to grow their businesses and contribute to job creation and nation-building. This is where Validus plays a key role as the largest digital SME finance provider across ASEAN.”
Goel told TechCrunch that its users are primarily MSMEs lending for short-term working capital needs, and that lenders include major international institutions (Citi, HSBC, FMO, Credit Saison, OikoCredit) and major domestic banks across Indonesia and Thailand (CIMB Niaga, Bank Mandiri). One of its differentiators, Goel said, is its unique partnerships, which number more than 100 across the Southeast Asian region.
“Validus is the largest SME financing marketplace in Southeast Asia based on outstanding loans or monthly loan disbursements, and currently receives an average of $150 million in new loan disbursements per month,” Goel said.
Over the past three years, the startup has experienced growth in both revenue and net profit.
“Over the past three years, we have grown our consolidated group revenue at a 69% CAGR, and more importantly, our Indonesian business, our largest market among the four countries where we operate, has been net positive and a source of positive cash flow for the group since 2022,” Goel told TechCrunch. “Our EBITDA margin is over 50% and we are targeting to be cash flow positive at the consolidated group level by early next year.”
The company has more than 300 employees across five countries, but would not disclose how many customers it has.
It has raised approximately $75 million in total capital. Previous investors include Vertex Ventures Southeast Asia and India, Vertex Growth, FMO, 01Fintech, NongHyup Financial Group, Norinchukin Bank, Aizawa Asset Management, and Lotte F&L.
