SG: Vertex-backed Validus Capital sets up $15m SME fund, eyes regional expansion

Ajit Raikar, Co-Founder & CEO, Validus Capital

Singapore-based online financing platform Validus Capital has launched an S$20 million ($14.92 million) SME financing fund in partnership with asset and wealth manager Lighthouse Canton Group.

The fund, dubbed the LCV Trade Finance Fund, will eventually be scaled up to S$200 million ($149.19 million), said Validus Capital in a statement.

“Validus Capital’s curated online financing platform is helping responsible corporates in Singapore help their SME vendor base and ensure SME vendors have access to growth capital at bank-like rates. Our collaboration with Lighthouse Canton ensures that we bring strong, stable and reliable investors on our platform to support the ever-growing financing need of Singapore SMEs,” said Validus Capital co-founder and CEO Ajit Raikar.

While Lighthouse Canton co-founder and chief investment officer Rajesh Sundaresan said: “SME financing is a lucrative and exciting space that we have been exploring for some time now. This investment opportunity is rarely accessible to investors. With the launch of this fund, we will bridge this gap between demand and supply which until now was being intermediated by the banking channels. This investment, while offering better returns than similar duration fixed income investments, will also allow investors to diversify their fixed income portfolio outside of large corporate exposure.”

The Monetary Authority of Singapore-licensed financing platform claims to be one of the leading SME financing marketplaces in Singapore, having disbursed over S$85 million ($63.4 million) in the past 24 months.

Against the backdrop of an S$20 million SME financing gap in Singapore, Validus Capital aims to finance at least S$1 billion ($750 million) of the gap in the coming three years.

In an email interaction with DEALSTREETASIA, Ajit said the platform is growing between 20 per cent and 25 per cent monthly, or 400 per cent year-on-year in terms of disbursements.

“We are already doing about S$10 million ($7.46 million) of financing in Singapore each month. Going by current growth, we expect to reach disbursements of S$200 million per annum in 12 to 14 months’ time, across the geographies that Validus Capital will be present in.

“We are starting Validus Indonesia in July 2018, and another country in January 2019. We would look to raise Series B, possibly by end of this year, with only a few strategic investors,” he said, adding that Indonesia is a huge untapped market for SME financing – five times the size of Singapore.

Founded in 2015, Validus Capital last raised a $3 million Series A round from Vertex Ventures last July.

According to Ajit, the use of machine learning, and AI technology in identifying and underwriting small businesses will be another big area of investment for Validus Capital.

“Validus Capital uses machine-learning and AI to unleash new insights into local businesses. The team of Validus data scientists analyses and utilises new, complex datasets that will help make better-informed lending decisions and predicting needs for local businesses as they win new contracts and projects,” he added.

Also Read:

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.