Singapore-based fintech startup focussing on peer-to-peer (P2P) lending service Validus announced that it has raised over S$20.5 million (US$15.2 million) in an oversubscribed Series B funding.

The funding was led by Netherlands-based development bank FMO, joined by Taiwan’s Cathay Financial Holdings, Singapore’s Openspace Ventures (previously NSI Ventures), Temasek investment arm Vertex Ventures, Thailand’s AddVentures by SCG and Vietnam’s VinaCapital Ventures.

This would be FMO’s first ever investment in Asia.

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With the funding, the company said it will focus on product development including artificial intelligence (AI) and machine learning. It also plans to expand to Indonesia in Q2 2019 followed by Vietnam..

“Southeast Asia is one of the fastest growing economic regions globally, where there is a clear need for alternative financing platforms such as Validus to complement the traditional banking and financial infrastructures. Our mission is to become a digital ‘bank-like’ fintech for underserved SMEs, to build better business communities in emerging markets while promoting inclusive growth among the region’s SMEs using AI complemented with accessible and affordable business finance to SMEs,” said Ajit Raikar, Chief Executive Officer and Co-Founder, Validus Capital.

Validus was founded in Singapore in 2015, and it facilitates the pairings of accredited individual and institutional lenders with SMEs. The company seeks to solve the problem of the lack of access to credit for Southeast Asian SMEs.

McKinsey Global Institute reported that 39 million Southeast Asian SMEs (or 51 per cent) lack access to credit despite the fact that SMEs contribute around 40 per cent of Southeast Asia’s gross domestic product (GDP) and employ 70 per cent of the region’s workforce, as told in a report by Deloitte.

Validus works by building cluster communities through its Corporate Partnership model which delivers financial inclusion to SME vendors. This enables small businesses to execute projects while growing their business and manpower via sustainable capital. Validus comprises of SME lending team that cultivates financial data on behavioural patterns.

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To date, Validus has introduced two new products called Working Capital Financing and Purchase Order Financing. The company said almost 2,000 loans were disbursed in 2018, and it has driven S$180 million (US$133.3 million) in business funding domestically.