Validus Vietnam, the Vietnam entity of Singapore-based small and medium enterprises (SME) growth financing platform Validus; TTC Group, a multi-industry conglomerate in Vietnam and Indochina; and Do Ventures, an early-stage venture investment fund in Vietnam announced Friday a joint venture (JV) to drive financial inclusion and empower the growth of underserved SMEs in Vietnam.

TTC Group has participated in the JV through its group company DHA Corporation (DHAC), a group investing in real estate, health, and sports.

Validus said in a statement that the JV underscores the mutual commitment of all parties to advancing SME growth in Vietnam and creates multiple synergies – one of which is TTC’s large ecosystem of SMEs across the energy, real estate, cane sugar, and hospitality industries in Vietnam.

At the same time, Do Ventures’ deep expertise in the emerging FinTech landscape in Vietnam will be a strong support for Validus Vietnam’s growth ambitions, and the JV will benefit from potential synergies with portfolio companies under Do Ventures in future.

SMEs play a pivotal role in Vietnam’s economy, however, access to credit remains a pressing issue for SME development in Vietnam, with the SME financing gap standing at 12 percent of its gross domestic product (GDP).

According to a World Bank Survey on the impact of Covid-19 on firms in Vietnam, the lack of access to finance has been exacerbated as liquidity remains a challenge under a continuous reduction in demand. About 50 per cent of firms have under three months of cash flow, and over 60 per cent of firms have reported some difficulties with access to finance.

“Contributing to the recovery and growth of SMEs is a key priority for us, and this JV will create sustainable value for the SMEs in our ecosystem,” said Dang Hong Anh, Chairman of DHAC.

Meanwhile, Validus Co-founder and Group Chief Executive Officer Nikhilesh Goel said that as Validus Vietnam scales to the next phase of growth, this JV reaffirms its mission to drive financial inclusion and increase SMEs’ access to affordable credit.

“Using our proven proprietary data-driven approach and credit-scoring models, we will leverage synergies to expand credit access, alleviate liquidity challenges and bring value to SMEs in all parts of the supply chain,” he said.

Founded in 2015 to address the unmet financing needs of SMEs, Validus is Southeast Asia’s leading SME digital financing platform. It is headquartered in Singapore and is present in four markets – Indonesia, Singapore, Thailand and Vietnam.

Validus uses data analytics and AI to drive growth financing to the underserved SME sector via funds from individual and institutional investors. It holds a Capital Markets Services Licence by the Monetary Authority of Singapore (MAS) and is also licensed by Otoritas Jasa Keuangan (OJK) in Indonesia and Securities and Exchange Commission (SEC) in Thailand.

Since its launch in 2015, Validus has disbursed over $1 billion in SME loans across Singapore, Vietnam, Indonesia and Thailand. The company is backed by highly reputed venture capitals (VCs) including FMO, Vertex Growth, Vertex Ventures Southeast Asia and India, AddVentures by SCG, K3 Ventures, Openspace Ventures and VinaCapital Ventures.

“The pandemic has accelerated the digital transformation of SMEs in Vietnam, and there is a large opportunity for FinTechs to create meaningful and lasting impact through partnerships and technology. We’re excited to be at the forefront of this and we look forward to harnessing synergies to strengthen SME resilience, drive growth for SMEs, and in turn, the economy,” said Vy Le, General Partner of Do Ventures.

Do Ventures is a $50 million early-stage venture capital fund that serves as a strategic partner for startups. The fund seeks investment opportunities in technology startups that can develop meaningful products and services to improve the lives of consumers in Vietnam and Southeast Asia.

Do Ventures believes that for a startup to grow rapidly, its founders must have outstanding execution capabilities and be willing to do more to make more right decisions and outpace the competition. Do Ventures’ notable investments include F99, Palexy, Manabie, MFast, VUIHOC, and Bizzi.

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