Singapore FinTech firm Validus announced Tuesday that it has entered into an agreement with Citi to acquire its CitiBusiness loan portfolio in Singapore, in a move that will bolster Validus’ top line revenue, customer base, and expand its growing loan book.
This is the first time a FinTech in Southeast Asia is acquiring an established bank’s loan portfolio and customer base, and it underscores Validus’ trailblazing FinTech leadership as it continues to extend its leadership position as the top small and medium sized enterprises (SME) growth financing platform in Southeast Asia, Validus said in a statement.
The transfer of Citi Singapore’s small business banking unit’s loan portfolio to Validus is expected to be completed by April 2022.
“As we continue our relentless focus on growth, today’s acquisition marks a new inflection point for us. This opportunity to acquire the CitiBusiness loan portfolio could not have come at a better time for us; it is a complementary fit for our existing business and will enable us to rapidly expand our customer base and loan book,” said Validus Co-founder and Executive Chairman Vikas Nahata.
He is confident that there is value creation for the Citi customers who will be transferred to Validus.
“Through our digital platform, they will be able to access additional financing solutions to grow their business, financial services such as business accounts, cards and money transfers, and tools to manage their business finances in a smarter and more efficient way. We are excited to welcome Citi’s customers and we remain committed to delighting them with innovative products and excellent customer experiences,” he added.
Validus’ acquisition of the CitiBusiness loan portfolio comes on top of several strategic moves by Validus recently, including the acquisition of KlearCard, a business payments and expense management technology platform. The FinTech frim has identified several strategic drivers for growth; in addition to strategic acquisitions and investments in technology, it has also been expanding its team rapidly in Southeast Asia, with its team growing by over 25% in the past 6 months with majority coming in support of new technology and neobank initiatives.
The company has grown its monthly loan origination by more than six times since the onset of Covid-19 and this acquisition marks a new inflection point in Validus’ growth, as an active merger and acquisition strategy will now bolster the steady organic growth.
“The sale of the Citibusiness loan portfolio in Singapore follows our previous announcement to wind down our small business banking unit after a strategic review. Our priority is to ensure a smooth transition of our customers and loans to Validus, who we believe can continue to serve them and meet their needs,” said Citibank Singapore Head of Mortgage & CitiBusiness Roy Phua.
Founded in 2015 to address the unmet financing needs of SMEs, Validus is Southeast Asia’s leading SME growth financing platform, which has now expanded beyond lending solutions to become ASEAN’s first SME-focused, full-suite financial services provider. The company is headquartered in Singapore and is growing rapidly across its four markets – Indonesia, Singapore, Thailand and Vietnam. It uses data analytics and artificial intelligence (AI) to drive growth financing to the underserved SME sector via funds from individual and institutional investors. It holds a capital markets services license 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 across more than 50,000 loans to small businesses in Singapore, Vietnam, Indonesia and Thailand. The company which is backed by highly reputed venture capital firms including FMO, Vertex Growth, Vertex Ventures Southeast Asia and India, AddVentures by SCG, K3 Ventures, Openspace Ventures and VinaCapital Ventures, expects to double the amount in the next 12 months.