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SME financing is a big opportunity in Asia. According to the World Economic Forum, Southeast Asia alone is home to some 71 million MSMEs, representing 97% of all businesses in the region.
However, these MSMEs have historically not been able to access traditional financing solutions such as bank loans. Some turn to illegal money lenders to get the cash they need, and the stories you hear about this can be incredibly heartbreaking.
Startups like Validus, a Singapore-based financing platform, have come in to make a difference in this regard. Using tech such as machine learning, these startups can better assess MSMEs’ suitability for loans and offer them the credit they need while taking on minimal risk.
And Validus seems to have done pretty well for itself addressing this market, if its financials are any indication.
Today we look at:
- How Validus has fared in the past year
- A startup working on brain-computer interface technology
- Other newsy highlights such as the question marks around TikTok’s fate in the US and Saudi Arabia’s potential AI initiative
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That’s pretty validating for Validus
Image credit: Timmy Loen
Validus recorded US$14.8 million in revenue for 2023, a 42% year-on-year increase. The fintech firm also narrowed its loss after income tax by more than 50% over the same period. What led to this growth?
- The main drivers: The uptick in revenue was driven by a significant increase in Validus’ loan book. The firm’s revenue mainly comes from commissions on loans disbursed to borrowers and on interest earned by lenders on the platform. It also directly extends loans on the platform and earns interest income from them.
- Beyond loans: Validus has also been expanding its product offerings beyond loans. It currently offers neobanking products such as business accounts, corporate cards, foreign exchange money transfers, and expense management tools.
- All eyes on Indonesia: The biggest engine of growth for Validus has been Indonesia, where it operates as Batumbu. Indonesia presents a significant growth opportunity for the company, given that 64.2 million SMEs account for 61% of the country’s GDP.
Read more: Validus halves losses amid 1.4x growth in loan portfolio
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