Validitya Singapore-based small and medium-sized business lending platform, acquires CitiBusiness’ loan portfolio for an undisclosed amount to bolster its revenue and customer base and expand its growing loan portfolio .
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 to hundreds of small businesses in Singapore, which is the target market that Validus serves, Goel added.
“Through this acquisition, we will not only be able to digitally meet the financing needs of these SMEs to grow, but also offer them business accounts, expense management solutions and payment services to run their business,” said Goel at TechCrunch.
Goel also said the deal will be funded through a securitization facility that Validus is arranging with a number of global financial institutions. The acquisition will be finalized in April 2022.
This is Validus’ second acquisition, noted Goel. Last year she acquired Klear Card, Singapore’s corporate payment and expense management platform.
In June 2021, Citi Singapore has been reported to close its CitiBusiness unit, which serves small and medium-sized enterprises (SMEs). Citigroup has also agreed to sell its retail business in Southeast Asia in Indonesia, Malaysia, Thailand and Vietnam to Singapore-based United Overseas Bank for about $3.7 billion in January.
“The sale of the CitiBusiness Singapore loan portfolio follows our previous announcement to end our small business banking unit after a strategic review,” said Roy Phua, Head of Mortgages and CitiBusiness, Citibank Singapore. “Our priority is to ensure a smooth transition of our consumers and our loans to Validus, which we believe can continue to serve them and meet their needs.”
Validus made freelance hires to manage the CitiBusiness team while acquiring the loan portfolio and customers, Goel noted.
“We believe there is value creation for Citi customers who will transition to Validus,” said Vikas Nahata, co-founder and executive chairman of 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, money transfers and tools to manage their business finances from smarter and more efficient way.”
Since its last funding in May 2020, Validus has grown its team significantly, adding more than 25% new hires. In January, the company reached a milestone of over $1 billion (SG$1.6 billion) in total funds disbursed on more than 50,000 loans to small businesses in Singapore, Vietnam, Indonesia and in Thailand. On average, 90% of its customers are return borrowers, Goel added.
The company will wrap up another fundraiser, Goel said, without providing further details. Validus is backed by investors such as FMO, Vertex Growth, Vertex Ventures Southeast Asia and India, AddVentures by SCG, K3 Ventures, Openspace Ventures and VinaCapital Ventures.