SINGAPORE, Dec. 14, 2023 – 01Fintech, a growth stage private equity firm founded by former Ant-Group executive and specialising in financial technology in Southeast Asia, today announced a significant US$20-million investment in Validus, a market-leading small-and-medium-enterprises (SME) supply-chain financing platform with operations in Indonesia, Singapore, Thailand and Vietnam.
Validus drives financial inclusion and prosperity for small businesses by leveraging proprietary data and AI to drive growth financing to the under-served SME sector, resulting in faster and effortless one-stop financial solutions that increase SMEs’ productivity and cost savings.
The investment will enable Validus to accelerate its expansion plans in fast-growing markets like Indonesia, to enhance its technology innovation, and solidify its position as the market leader in the supply chain financing. 01Fintech recognizes the tremendous potential of Validus’ unique approach to SME financing which has led to its rapid growth and partnerships with the world’s largest financial institutions such as Citibank and other major global banks. Since its inception in 2015, Validus has disbursed more than US$3 billion[1] in loans to small businesses across Southeast Asia. Against the backdrop of a challenging macroeconomic environment, Validus has continued to deliver quality growth, and show positive upward trends across all key performance metrics, including 50% in revenue growth and 40% decrease in losses this year. Validus is backed by highly-reputed investors including Vertex Ventures Southeast Asia and India, Vertex Growth, FMO, and several major East Asian financial institutions including NorinChukin Bank and NongHyup Financial Group, and their continued participation indicates strong confidence in the company’s business model.
Southeast Asia represents a tremendous US$490 billion SME financing gap opportunity for specialized digital lenders with strong credit assessment capabilities. The Asian Development Bank estimates micro, small, and medium-sized enterprises (MSMEs) make up 97% of all regional enterprises, employ 69% of the labor force and contribute significantly to 42% of the GDP. Still, most SMEs do not have access to sufficient credit and liquidity required for their daily working capital needs. Over 60% of these private enterprises cannot get loans when they need them; operators and their employees are forced to live cash-in-hand which creates a bottleneck for growth. Validus’ focus on addressing the unmet financing needs of SMEs aligns with 01Fintech’s mission of supporting financial technologies that enhance inclusion for the under-banked and under-served communities.
“We are extremely excited to partner with Validus on their exciting growth journey. Their innovative data-driven approach, strong credit assessment capabilities, and continuous learning technologies which automate the assessment process has proven to be a game-changer and acknowledged by the industry through its multiple awards. Validus has a unique strategic ecosystem partnership model with brand owners, conglomerates, and public companies across Southeast Asia, which enables them to better serve the upstream SME suppliers and downstream buyers. These partners provide critical proprietary supply chain data to Validus, which will continuously improve its risk underwriting models and algorithms, a unique strength that other similar companies do not have. By leveraging their existing approach to supply chain financing, we believe Validus can further tap into the merchant bases of other platforms and provide supply chain financing in a seamless, automated way. This investment reflects our conviction in the team’s capabilities and passion to address a huge pain point facing SMEs in Southeast Asia and its vision to be the number one supply chain financing service provider in the region,” said Kenny Man, Managing Partner of 01Fintech.
Growth-stage investors like 01Fintech, are setting their sights on the region given its favorable demographics and growth prospects. 01Fintech stands apart from traditional private equity firms that simply provide capital. The founder, Kenny Man, has successfully invested, groomed, and sat on the board of numerous fintech unicorns in the past. The experience of having a front row seat to the rise of SEA’s largest fintechs such as Paytm, GCash, KakaoPay, and many others can provide invaluable insight to aspiring firms. In addition, his team has extensive technological, product, and growth operations experience which enables them to go beyond funding and regularly offers strategic, operational, technical, and business development guidance and opportunities to portfolio companies by leveraging 01Fintech’s extensive blue-chip global LP network that comprises prominent fintech CEOs, family offices, financial institutions, and conglomerates in Asia Pacific such as Sinar Mas, Ayala, and VNG.
“This investment by 01Fintech is a significant milestone for us. We are excited about the opportunities this partnership will unlock for us. With the support of 01Fintech, we aim to cement our leadership as the number one digital SME financing company in the region. We will be able to tap into their expertise and vast network in the region. The in-depth due diligence 01Fintech has done has shown their deep domain expertise and willingness to identify areas of growth to bring the company to the next level. We continue to stay focused on our mission of providing more accessible financial products and services to SMEs across Southeast Asia, and look forward to a successful collaboration that will continue to drive innovation in supply chain financing,” said Nikhilesh Goel, Co-founder and Group CEO, Validus.
