Southeast Asian SME financing platform Validus has raised $20 million in an extended Series B funding co-led by Vertex Growth Fund and Kuok Group’s Orion Fund managed by K3 Venture Partners.
This brings the total capital raised for Series B and Series B+ to $35.2 million, in addition to the $15.2 million round led by Dutch development bank, FMO in February last year. This round was joined by Vertex Ventures Southeast Asia and India, Openspace Ventures, Thailand’s AddVentures (Siam Cement Group) and Vietnam’s VinaCapital Ventures.
According to a statement, Validus said that the newly raised funds will be invested in technology and innovation. It will also be used to fund its upcoming expansion into Thailand in Q4 of this year. Validus currently operates in three markets: Singapore, Indonesia (Batumbu) and Vietnam (Validus Vietnam). The Singapore-headquartered company launched its Indonesian and Vietnam entities in May and November last year respectively.
Validus’s fundraising comes at a time when startups are under rising pressure to stay sufficiently capitalised until the COVID-19 impact blows over. Southeast Asia’s lending sector also has a multitude of competitors battling for market share, ranging from regional ones like Funding Societies and Finaxar to more local players like UangTeman and Investree in Indonesia.
“Fintechs with a robust platform and resilient leadership, who are able to survive and thrive in these unprecedented times will be leaders of tomorrow,” said Validus co-founder Nikhilesh Goel.
The COVID-19 outbreak is likely to trigger a wave of consolidation in some of Southeast Asia’s largest markets including Indonesia and Vietnam, as industry observers watch for rising non-performing loans (NPLs) and default rates among local peer-to-peer (P2P) platforms.
In Indonesia, P2P default rates which already been widely under-reported, have been climbing steadily over the past year. In Vietnam, the P2P lending industry is expecting higher NPLs triggered by greater demand due to the coronavirus. This has made survival for many of these local players even more challenging as markets continue to contain the spread of COVID-19.