Validusa Singapore-based lending platform for small and medium-sized businesses, is acquiring CitiBusiness’ loan portfolio for an undisclosed amount to strengthen its revenue and top customer base and expand growing loan list.
Nikhilesh Goel, co-founder and CEO of Validus, told TechCrunch that Validus expects to create synergies with the loan portfolio of CitiBusiness, the small banking unit of Citi Singapore. This is a portfolio of loans for hundreds of small businesses in Singapore, the target market that Validus serves, Goel adds.
“With this acquisition, we will not only be able to further digitally serve the financial needs of these SMEs to grow, but also provide them with business accounts, management solutions, and more. spending management and payments services to manage their businesses,” Goel told TechCrunch.
Goel also said that the deal would be funded through a securitization facility that Validus is arranging with a number of global financial institutions. The acquisition will be completed by April 2022.
This is Validus’ second acquisition, Goel noted. Last year, it acquired KlearCard, Singapore’s business payments and expense management platform.
In June 2021, Citi Singapore reported is about to close its CitiBusiness unit, which serves small and medium-sized business (SME) customers. Citigroup also agreed sell its Southeast Asian retail operations in Indonesia, Malaysia, Thailand and Vietnam for Singapore-based United Overseas Bank for about $3.7 billion in January.
“The sale of our CitiBusiness loan portfolio in Singapore in accordance with our earlier announcement is aimed at shrinking our small business banking unit,” said Roy Phua, head of CitiBusiness and mortgages at Citibank Singapore. me after reviewing the strategy. “Our priority is to ensure a smooth transition of our consumers and loans to Validus, who we believe can continue to serve them and meet their needs. ”
Validus independently hired to manage the CitiBusiness team while acquiring the loan portfolio and customers, Goel noted.
Vikas Nahata, Co-Founder and Executive Chairman of Validus, “We are confident that there is value creation for Citi customers who will be transferred to Validus. “Through our digital platform, they will be able to access additional financial solutions to grow their business, financial services such as business accounts, cards, money transfers and other tools. to manage their business finances in a smarter and more efficient way.”
Since its last funding in May 2020, Validus has grown its team significantly, adding over 25% new employees. In January, the company passed a milestone of more than $1 billion (S$1.6 billion) in total disbursements for over 50,000 loans to small businesses in Singapore, Vietnam, and Indonesia. and Thailand. On average, 90% of their customers are return borrowers, Goel added.
Goel said the company will wrap up another round of fundraising without providing further details. Validus is backed by investors including FMO, Vertex Growth, Vertex Ventures Southeast Asia and India, SCG’s AddVentures, K3 Ventures, Openspace Ventures and VinaCapital Ventures.