Validus, a digital lending platform based in Singapore, recently announced a significant milestone in securing $50 million in debt financing from HSBC under the ASEAN Growth Fund strategy. This funding will be instrumental in supporting the financial inclusion of micro, small, and medium enterprises (MSMEs) in Indonesia, addressing the challenges they face in accessing financial resources.
Indonesia, with its 64.2 million MSMEs contributing 61% of the country’s GDP, presents immense potential for growth. However, only a small percentage of these businesses are tapping into the online ecosystem and e-commerce. This is primarily due to the stringent operational, reporting, and collateral requirements set by commercial banks, as highlighted in a 2017 World Bank report. Despite government initiatives, only a fraction of bank loans are allocated to MSMEs in Indonesia.
Founded by Vikas Nahata and Nihkilesh Goel in Singapore in 2015, Validus has pioneered a supply chain-focused lending model that leverages non-traditional data access through partnerships with traditional banks and international institutions. The platform has since expanded its operations to include Indonesia (Batumbu), Thailand (Siam Validus), and Vietnam (Validus Vietnam).
Nikhilesh Goel, the CEO of Validus, emphasized the importance of providing small businesses with access to stable and accessible working capital to foster growth and contribute to job creation and nation-building. Validus stands out as the largest digital SME financing provider across ASEAN, offering a range of financial solutions to MSMEs in need.
The platform’s user base consists of MSMEs seeking short-term working capital, while lenders include major international institutions such as Citi, HSBC, and local banks like CIMB Niaga and Bank Mandiri. Validus prides itself on its network of over 100 unique partnerships across Southeast Asia, enabling it to facilitate an average of $150 million in new loan disbursals every month.
Over the past three years, Validus has demonstrated significant growth in both revenue and net profits, with the Indonesia business turning net profit positive in 2022 and generating positive cash flow for the group. With EBITDA margins exceeding 50%, the company aims to achieve cash flow positivity at a consolidated group level by early next year.
With a workforce of over 300 employees across five countries, Validus has raised approximately $75 million in total equity funding from investors such as Vertex Ventures, FMO, and NongHyup Financial Group. The platform’s success and commitment to financial inclusion underscore its position as a key player in empowering MSMEs across the ASEAN region.
