Validus, a Singapore-based lending platform for small and medium-sized businesses, is buying CitiBusiness’ loan portfolio for an unknown sum in order to boost its top-line income, client base, and loan book. Validus co-founder and Group CEO Nikhilesh Goel told TechCrunch that the company aims to develop synergies with CitiBusiness, Citi Singapore’s small banking subsidiary. Goel said that it is a portfolio of loans to hundreds of small firms in Singapore, which is Validus’ target market.
“With this purchase, we will be able to not just digitally handle these SMEs’ finance needs, but also give them business accounts, spend management tools, and payment services to help them manage their businesses,” Goel told TechCrunch. Validus is organizing a securitization arrangement with a number of major financial institutions, according to Goel. In April 2022, the transaction will be finalized.
According to Goel, this is Validus’ second acquisition. It bought KlearCard, a Singapore-based company payments and spending management platform, last year. Citi Singapore’s CitiBusiness unit, which services small and medium-sized enterprises (SMEs), is expected to close in June 2021. In January, Citigroup agreed to sell its Southeast Asia retail businesses in Indonesia, Malaysia, Thailand, and Vietnam to United Overseas Bank of Singapore for $3.7 billion.
“The sale of the CitiBusiness loan portfolio in Singapore follows our prior announcement to wind down our small business banking operation in Singapore following a strategic assessment,” said Roy Phua, Citibank Singapore’s head of mortgage and CitiBusiness. “Our first objective is to ensuring that our customers and loans are seamlessly transferred to Validus, who we feel will be able to continue to service them and satisfy their expectations.”
According to Goel, Validus has hired independent managers to supervise the CitiBusiness staff while purchasing the loan portfolio and clients. Validus co-founder and executive chairman Vikas Nahata said, “We are optimistic that there will be value creation for Citi clients who will be moved to Validus.” “They will be able to access more financing alternatives to build their business, as well as financial services like as business accounts, cards, and money transfers, as well as tools to manage their business finances in a better and more effective manner, using our digital platform.”Validus’ staff has grown significantly since its last fundraising round in May 2020, with over 25% new employees. In January, the company reached a critical milestone, disbursing more than $1 billion (SG$1.6 billion) in total money to small enterprises in Singapore, Vietnam, Indonesia, and Thailand. Goel stated that 90 percent of his customers are repeat borrowers. Goel said the business will be completing another fundraise, but he didn’t elaborate. FMO, Vertex Growth, Vertex Ventures Southeast Asia and India, AddVentures by SCG, K3 Ventures, Openspace Ventures, and VinaCapital Ventures are among Validus’ investors.