Vertex Ventures has invested $3 million (S$4.1 million) in Validus Capital, an online fintech marketplace for small and medium enterprises (SMEs) based in Singapore. Validus Capital said will use the Series A cash infusion to fund technology initiatives and enter new geographies across the region.
The round saw Validus raise another $600,000 (S$829,251) from angel investors in addition to the investment from Vertex Ventures.
Validus helps SMEs to secure short and medium term financing from accredited investors, using proprietary algorithmic assessment. Earlier this year, it raised a S$1 million pre-Series A round from angel investors, most of whom are senior professionals and corporate leaders across financial services, FMCG, educational, and real estate firms.
“The Vertex backing gives us the added impetus to forge ahead and reach out to a large SME base in Singapore and provide them with ease of financing”, said Ajit Raikar, CEO, Validus Capital.
According to a media release, Validus Capital has been growing at 100 per cent in terms of disbursements. In less than two years, it has financed over 100 facilities for SMEs across different sectors in Singapore and disbursed over $22 million.
Additionally, Validus has developed its own proprietary algorithm using a rigorous triple layer of due diligence and recently added a fraud detection algorithm to their underwriting algorithm and claims to be the only Singapore-based online lending platform that can insure their accredited investors for up to 90 per cent capital protection of loans given to SMEs.
As part of its expansion, the firm is forming partnerships with several corporates to provide bespoke solutions to their SME vendors and customers across different sectors.
These financing solutions, targeting the supply chain/vendor segment, enables them to free up cash flow.
Data released by Monetary Authority of Singapore (MAS) indicates the business loan market in the city-state had a capitalisation of $357 billion in 2015.
Over the same period, global peer to peer lending market was valued at $26.16 billion, according to Transparency Market Research.
Speaking on the investment, Joo Hock Chua, Vertex Ventures SEA/India Managing Partner, comments: “ Validus has one of the strongest teams in the region displaying diversity and depth of experience in the financial industry. Their SME risk assessment model has been endorsed underwritten by a professional insurance company.”